November 19, 2012 / 1:56 PM / in 5 years

UPDATE 1-Brazil cbank director confident on pace of recovery

* CenBank’s Pereira sees GDP growing more than 4 pct in Q4

* Recent data has stoked worries over pace of recovery

By Neha Dasgupta

MUMBAI, Nov 19 (Reuters) - Brazil’s economy will grow more than 4 percent in the fourth quarter of 2012 compared with a year ago, central bank Deputy Governor Luiz Awazu Pereira da Silva said on Monday, signaling his confidence with the pace of recovery in the world’s No 6 economy.

Pereira’s forecast matches the central bank’s previous estimates, which have started to be questioned by some private economists after a string of mediocre economic results in September.

“After growing by 2.7 percent in 2011, output is expected to be expanding by more than 4 percent” in the fourth quarter of the year, he said in a speech at a seminar on capital flows in Mumbai, organized by the Reserve Bank of India and the Asian Development Bank.

In a separate event in Brasilia, Deputy Finance Minister Nelson Barbosa said Brazil’s gross domestic product will grow about 1 percent from the third quarter on a seasonally adjusted basis, up from 0.4 percent in the second quarter.

A drop in economic activity as well as a contraction in industrial output in September fueled worries of another false start of the Brazilian economy, which has remained nearly stagnant for more than a year.

Economists cut their forecasts for Brazil’s 2013 economic growth for the first time since August, a weekly central bank survey showed on Monday. They see the economy expanding 3.96 percent in 2013, down from a previous estimate of 4 percent.

The Brazilian economy has showed signs of life in the third quarter after a year of non-stop fiscal and monetary stimulus to revive activity following a dramatic slowdown.

The central bank’s eight-member monetary policy committee has cut the benchmark Selic interest rate by 525 basis points to a record low of 7.25 percent. The bank is expected to halt its year-long easing cycle at its next meeting on Nov. 28.

In September, the central bank cut its 2012 economic growth estimate to 1.6 percent from 2.5 percent. The bank sees the economy expanding 3.3 percent in the annual period ending on June 2013, from same period a year ago.

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