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This year, Brazilian GDP will grow about 2%

This year, Brazilian GDP will grow about 2%

Brazilian President Luiz Inacio Lula da Silva said on Thursday his country’s economy will grow at least 2% this year, “maybe even more,” echoing upbeat forecasts from his economic team after a better-than-expected performance in the first quarter.

Lula, speaking in an interview with a pool of radios from Goias state, said Brazil was regaining international credibility under his watch, a day after S&P revised its outlook for the country to “positive” from “stable”.

“I’m convinced – you can call me for another interview at the end of the year and I’ll show you that GDP has grown and Brazil’s economy has stabilized,” said Lula, who took office in January.

The leftist leader once again criticized interest rates that are at a six-year high of 13.75%, a level the central bank sees as necessary to tame high inflation, but which Lula views as hindering economic growth.

Lula said it was inexplicable to have rates at that level while 12-month inflation runs around 4%, adding that he met on Wednesday with retailers who also voiced concern over it.

Annual inflation in May reached its lowest in more than two years, but an uptick is expected from July due to unfavorable base effects.

Central bank Governor Roberto Campos Neto indicated earlier this week that an improvement in market conditions was paving the way for a shift in monetary policy.

Source: Reuters