Brazil’s economy will grow by at least 3 percent this year, the finance minister said By Reuters

BRASILIA (Reuters) – Brazil’s Finance Minister Fernando Haddad said on Wednesday he expected the government to raise its annual economic growth forecast to above 3 percent, up from the current projection of 2.5 percent.

“I think a 3 percent floor is already basically secured,” he told reporters.

The minister expressed some concern about inflation, especially due to climatic conditions, following severe droughts and fires that have affected various regions of Latin America’s largest economy.

“The impact of climate on food prices and possibly energy prices makes us a little concerned about that,” he said.

However, Haddad noted that raising interest rates cannot address the pressures on consumer prices stemming from this phenomenon.

The central bank is due to meet on September 17-18, with economists expecting a 25 basis point hike in the benchmark interest rate, which has been held at 10.5% in the last two policy meetings.

“The central bank has a very strong technical team to make the best decision,” Haddad said.