(MENAFN) Brazil's central bank has revised down its 2012 economic forecast to 1.0 percent from 1.6 percent previously in its recent quarterly inflation report, Reuters reported.
The central bank also lowered its projection for 2013 inflation to 4.8 percent from 4.9 percent previously.
The government targets inflation at 4.5 percent, with a tolerance margin of plus or minus 2 percentage points.
The central bank cut interest rates to a record low of 7.25 percent as part of President Dilma Rousseff's efforts to stimulate the economy.
The central bank expected monetary conditions to remain stable for a long period. However, stubborn inflation and a recent fuel price hike have triggered concerns about the bank's ability to keep borrowing costs stable for a long period as it forecasts.
Consumer prices accelerated at their fastest monthly pace since May 2011 in the month to mid-December, data showed.
The central bank's estimate for 2012 inflation was revised up to 5.7 percent, from 5.2 percent previously.
On the other hand, the bank expected Brazil's economy to begin recovering in 2013, with a 3.3 percent growth in the 12-month period through the third quarter of 2013.