BRASILIA: Brazil's central bank chief Alexandre Tombini said on Wednesday that inflation is under control and the Brazilian economy is gradually recovering from a slump, with industrial output showing signs of speeding up.
"Economic activity in Brazil will be more intense in this half of the year," he told a Senate committee hearing.
Tombini said recent measures taken by President Dilma Rousseff's government to stimulate the economy - including a major cut in electricity costs announced on Tuesday - will help contain price pressures in the medium term and bring about more vigorous and sustainable growth.
Employment, real income and credit continue to sustain demand in the Brazilian economy and retail sales continue to expand, the central bank governor said.
Tombini said annual inflation continues to move toward the center of the official target, although that process is not linear. The outlook remains favorable in the longer term despite supply shocks, he added.
Brazil will enjoy a record grains harvest this year and its services sector is expanding faster than GDP, he said.
The bank cut its benchmark Selic rate for the ninth straight time, to an all-time low of 7.5 percent, on Aug. 29, signaling that it may be done with a year-long easing cycle as the economy starts to show signs of life.
Tombini said the international scenario continues to be "very complex," with high market volatility.
But he said that recent measures taken in Europe have reduced the risk of an "extreme" event in the euro zone.
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