Brazil grows robustly, inflation in check-Mantega

Thu Jun 17, 2010 11:15am EDT

* Economy to grow 6-6.5 pct for rest of 2010-Mantega
* Inflation rate will fall within govt target by year-end

(Updates with more comments and context)

BRASILIA, June 17 (Reuters) - Brazil's economy will grow solidly in 2010, but a slowdown from the first quarter will allow the government to bring inflation back to target by year-end, Finance Minister Guido Mantega said on Thursday.

Latin America's largest economy grew a massive 9 percent year on year in the first quarter of 2010 and will grow between 6 and 6.5 percent on average for the rest of this year, Mantega said during a presentation in Brasilia.

That will make it possible for the annual IPCA consumer price index to fall back to within the government's target range for 2010 from 5.22 percent in its last reading in May. The government aims to keep inflation at 4.5 percent plus or minus 2 percentage points this year.

"In the first quarter, we are growing at a rate very close to China's... this shows that the Brazilian economy is dynamic and has the capacity for stronger growth," Mantega said.

He said there were already signs that the economy was slowing somewhat.
"Now we are heading towards growth levels that are more balanced and sustainable until the end of the year."

The comments come the same day Brazil's central bank struck a hawkish tone in minutes from the latest monetary policy meeting, warning that a narrowing output gap and a new expansion cycle could stoke inflation.