Brazil economy to grow at least 3% this year, finance minister says

BRASILIA (Reuters) – Brazil Finance Minister Fernando Haddad said on Wednesday that the government is expected to raise its annual economic growth forecast to above 3%, up from the current projection of 2.5%.

“I believe that a floor of 3% is already virtually secured,” he told reporters.

The minister expressed some concern about inflation, particularly due to climate conditions, following severe droughts and wildfires affecting various regions of the largest economy in Latin America.

“The impact of the climate on food prices and potentially on energy prices makes us a bit worried about this,” he said.

However, Haddad noted that raising interest rates cannot address consumer price pressures arising from this phenomenon.

The central bank is set to meet Sept. 17-18, with economists expecting a 25-basis-point increase in the benchmark interest rate, maintained at 10.5% in the last two policy meetings.

“The central bank has a very solid technical team to make the best decision,” Haddad said.