The 2012 growth forecast for the Brazilian economy has been cut for the third consecutive week by market analysts, falling dramatically from the previous estimate of 1.5% to just 1.27%.

Brazil Finance Minister Guido Mantega says 2013 will see growth of 4% or more. Photo by Antonia Cruz/ABr.

The news comes after disappointing figures for the third quarter of 2012, released a week earlier by the IBGE, Brazil’s national office of statistics.

With only 0.6% growth on the previous quarter, the figure was just half the 1.2% target predicted by market analysts for the quarter.

Finance Minister Guido Mantega said that while he was “surprised” with the weak growth, he remained adamant the economy could grow at least four percent in 2013, as he has previously stated.

Mantega recognized that 2012 had been a “very difficult” year, but said it was ending with a return to growth and upward trend for the economy. He also said that cuts in the SELIC, Brazil’s benchmark interest rate, would also reap future benefits:

“We are living a silent revolution in the economy. The return to growth has already started,” O Globo newspaper quoted the finance minister as saying.

However, he laid the blame for the downturn in Brazil squarely on the international economy, saying the relapse in the economic crisis has damaged investments, which he said would come back.

The comments follow similar criticism made by the finance minister in recent months on the way overseas economies have been dealing with the crisis, particularly those implementing a program of quantitative easing, like the U.S., a process which he vehemently opposes.

Yet others questioned the extent to which Brazil can truly blame other nations for its financial troubles. Most commentators have been baffled by what they see as Mantega’s overly-positive outlook for the economy in 2013, and the FT described the downturn as having “shaken Brazil from its dream”.

There was, however, some good news: the agriculture-livestock sector grew 2.5% in October. Industrial production also picked up, growing 0.9% on September and 2.3% year-on-year. However, the services industry flatlined in October.

Read the full article on The Rio Times site.