Banco Central do Brasil raised its forecast for GDP growth for the country to 2.2% for 2020, up 40 basis points from its previous estimation, according to the institution's quarterly inflation report.

For 2019, the central bank raised its estimate of economic growth to 1.2% from a previous 0.9% forecast.

"It's worth noting that this outlook will be conditioned by the continuation of the reforms and adjustments that are necessary for the Brazilian economy," the monetary authority wrote in the report.

The central bank, which lowered its benchmark rate by 50 basis points to 4.50% on Dec. 11, also upheld its previous inflation forecast of 3.5% for 2020 and 3.4% for 2021.