IMF downplays inflation fears in Brazil

IMF downplays inflation fears in Brazil

The International Monetary Fund on Thursday played down fears of rising inflation in Brazil, saying the overall performance of the economy continued to be strong.

"We view growth becoming firmly entrenched," Thomas Dawson, an IMF spokesman, said at a regular press briefing. He noted Brazil's two consecutive quarters of growth near 6 percent, surging exports and a "very strong current account," according to a Reuters report.

"So I would not focus on inflation numbers in particular," he said. "That is something the authorities obviously are looking at, but I think the overall pattern of performance in Brazil continues to be very strong."

Brazil has been struggling to control inflation. Brazil's central bank raised its inflation forecast in 2004 to 6.4 percent from 5.2 percent because of higher-than-anticipated fuel, food and utility price increases.

Hikes in telephone and electricity costs, as well as increased food costs after bad weather, could boost inflation in the coming months.

Brazil on Wednesday set an inflation target for 2006 of 4.5 percent and kept its similar 2005 goal as an indication it intends to keep a tight rein on rising consumer prices.