Thaindian News

Rio De Janeiro, Dec 13 (IANS) Credit rating agency Fitch Ratings Monday lowered Brazil’s GDP growth projection for 2011 from 3.5 to 2.8 percent.

The announcement came after Brazilian financial analysts had also reduced their estimates for the country’s GDP growth in 2011 to 2.97 percent, reported Xinhua.

In its latest quarterly Global Economic Outlook, Fitch put Brazil’s GDP growth next year at 3.2 percent, and described it as “below potential”.

Fitch said Brazil’s growth will be supported by domestic demand, but will be “dampened by high international financial volatility affecting the currency, commodity and domestic asset markets, which in turn hits domestic confidence”.

The country’s growth rate in 2013 is expected to be 4.5 percent, Fitch said.

“Brazil’s economy decelerated this year due to tighter monetary policy, including prudential measures to control credit growth and a restrictive fiscal stance. The manufacturing sector was hit by the strength of the Brazilian Real until recently and the withdrawal of stimulus measures,” the agency said.

Fitch also stressed that structural issues such as Brazil’s high tax burden and weak infrastructure continue to hinder the Brazilian industry’s competitiveness.

According to the agency, major advanced economies will register an average 1.3 percent growth rate this year. The figures are expected to fall to 1.2 percent in 2012, and rise to 1.9 percent in 2013.

BRIC countries, namely Brazil, Russia, India and China, on the other hand, are expected to sustain a “robust” economic growth in the near future, reaching 6.3 percent in 2012 and 6.6 percent in 2013.