MNI BRIEF: Activity Slowdown Required To Help BCB - Guillen

The Central Bank of Brazil expects a slowdown in GDP growth to bring inflation to the 3% target, BCB Deputy Governor for Economic Policy Diogo Guillen said Friday, adding that there are already signals of activity deceleration.

"A gradual slowdown in activity is in our baseline scenario, and it's necessary for the convergence of inflation to the target. To get inflation back to the target, we need to reduce the output gap and decelerate the economy a little bit," Guillen said in an event sponsored by Bank of Portugal.

"Today, we had the release of GDP coming in a bit weaker than expected and with household consumption also a bit lower than expected. And the question comes now whether such a baseline scenario of a deceleration is happening or not," he added.

He highlighted the GDP data released today, which showed that Brazil's economy grew 3.4% in 2024, also suggests that there was some moderation in household consumption. (See MNI INTERVIEW: BCB To End Hiking Cycle At 14.75% - Kfoury)