If Brazil is a proxy for China…

Author: Adam Button | Category: News

We better duck and cover.

Earlier today, Brazil’s central bank lowered its 2012 GDP forecast to 1.6% from 2.5%. The inflation forecast was also hiked to 5.2% from 4.7% in June. The 2013 inflation forecast was lowered to 4.9% from 5%.

Reuters reports:

The central bank has slashed 500 basis points off its benchmark Selic interest rate, and the government delivered a flurry of tax breaks and subsidized credit. All that stimulus is starting to support the economy, but may also stoke inflation that has accelerated on the back of a surge in global and domestic food prices.

Fitch has piled on by lowering Brazil growth forecast for next year.

Bonus: Back in June when Credit Suisse came out with a forecast for 1.5% growth, Brazil’s finance minister called it “a joke”.

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