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Brazil central bank chief says GDP projection could likely be lowered

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Brazil central bank chief says GDP projection could likely be lowered

The projection of Brazil's GDP in 2019 is likely to be revised downwards, Banco Central do Brasil President Roberto Campos Neto told Valor Econômico in an interview.

The statement by the head of the central bank comes on the heels of official data released by the country's statistics agency which show that the economy contracted by 0.2% in the first quarter. Financial agents have already trimmed GDP forecasts of more than 2.0% earlier this year to a modest 1.13%, in the latest Focus bulletin, in which 80 financial companies were surveyed.

Campos Neto also echoed the trend of the official government forecasts, which were recently reduced to 1.60% from 2.2% this year. An adjustment of the central bank's expectations of 2.0% for 2019, would be in tune with the recent corrections seen from the financial markets and the economy ministry.

The central bank president also said that a reduction of the Selic benchmark rate, which stands at 6.5% as a measure to boost the economy, would not be advisable at this time as it would hinder economic activity and even trigger inflation.

However, the president of the central bank denied accusations that the entity is not worried about economic growth. "The central bank is worried about growth, and the best way to contribute is to have credibility," Campos Neto said.