Brazil GDP to Accelerate This Quarter, Meirelles Says

Brazil’s central bank President Henrique Meirelles said economic growth will accelerate in the third quarter and that analysts should not come to “hasty” conclusions about policy makers’ future decisions.

“There will be a recovery — the question is to what level of activity and inflation,” Meirelles said in an interview with GloboNews TV network last night. “What we can’t do is to arrive at hasty conclusions. The central bank cannot signal what it doesn’t know.”

Yields on interest rate futures contracts due in January 2012, the most traded on Sao Paulo’s BM&F exchange, rose 2 basis points, or 0.02 percentage point, to 11.33 percent at 11:38 a.m. New York time. The January 2012 yield fell 27 basis points in the four previous sessions.

Traders are betting policy makers will keep the benchmark interest rate unchanged in September, after the central bank raised rates by a less-than-expected half percentage point in July, saying inflation risks had fallen. Meirelles said last night that the bank’s last decision was aimed at ensuring inflation would slow to its 4.5 percent target in 2011.

Meirelles said “we need to look with moderation and serenity” the economy’s “healthy” recovery from the second quarter slowdown. The World Cup and other temporary phenomenon contributed to slower growth in the April-June period, he said.

Estimates about economic growth and inflation must take into account competing pressures, including expanding credit and incomes as well as the withdrawal of fiscal and monetary stimulus earlier in the year, Meirelles said.

Surprise Increase

Central bank policy makers on July 21 raised the benchmark lending rate, known as the Selic, by a half-point to 10.75 percent, surprising 48 of 51 analysts surveyed by Bloomberg who expected a third straight 0.75-point increase.

Annual inflation slowed to 4.6 percent in July, the lowest level in six months, after prices were stable in June and rose 0.01 percent in July.

Latin America’s biggest economy is expected to grow 7.09 percent this year, according to a central bank survey of 100 economists published this week.

Analysts expect another 25 basis point increase, according to the central bank survey.