Rousseff Says Brazilian Government Focused on Slowing Inflation to Target

Brazilian President Dilma Rousseff said the central bank and the Finance Ministry are working together to bring inflation back to the 4.5 percent target as soon as possible.

Rousseff, speaking at an event in Brasilia yesterday, also said that Latin America’s biggest economy has matured enough to combine fast economic growth with consumer prices that are under control.

“We will ensure growth at a fast pace, inflation that is under control and we will continue to invest to overcome the limitations that still exist in the productive and social infrastructure,” Rousseff said. “The Finance Ministry and the central bank are working to ensure inflation is back to the mid- point of the target in the shortest time possible.”

Annual inflation accelerated to 6.51 percent in the year through April, the first time the benchmark IPCA index has exceeded the 6.5 percent upper limit of the inflation target since 2005. The central bank targets inflation of 4.5 percent, plus or minus two percentage points.

Policy makers have raised Brazil’s benchmark interest rate at all three meetings in 2011, with half-point increases in January and March before slowing the pace to a quarter-point last month to push the Selic up to 12 percent.

Brazil’s economic activity index, a proxy for gross domestic product, expanded 6.98 percent in the year through February, its fastest pace in six months, the central bank reported April 13.

“I know there won’t be sustainable development without monetary stability,” Rousseff said.

Latin America’s largest economy grew 7.5 percent last year, the fastest growth since the 1980s. Brazil’s economy will expand 4.5 percent this year, according to estimates by the Finance Ministry.

“Brazil has matured to control inflation and continue to grow,” the president said.

The real gained 0.6 percent yesterday to close at 1.6037 per dollar from 1.6141 on May 9.