UPDATE 1-Market outlook for Brazil growth less pessimistic -central bank

Thu May 8, 2014 1:31pm EDT

(Adds central bank director comments and context)

SAO PAULO May 8 (Reuters) - Market views about medium-term economic growth in Brazil are starting to become more balanced and less pessimistic, central bank director Luiz Awazu Pereira said on Thursday.

In a speech to business leaders in Sao Paulo, Pereira said the U.S. Federal Reserve's stimulus tapering is well-managed, but will bring some market volatility.

Central bank chief Alexandre Tombini has in the past complained that markets were excessively pessimistic about Brazil following three years of subpar growth in the once-booming emerging-market nation.

Pereira said strong economic fundamentals and policy responses in emerging nations have started to change that pessimistic stance.

He reiterated that the bank is working to bring inflation back to the center of the target range in the near future, but acknowledged that monetary policy has lagging effects on prices.

The Brazilian central bank has raised its benchmark Selic rate by 375 basis points since April of last year, but recently signaled it may be done hiking borrowing costs. (Reporting by Tiago Pariz; Writing by Alonso Soto; Editing by Chris Reese)

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