WRAPUP 1-Brazil’s Fin Ministry ups 2010 growth forecast

* Fin Ministry expects 2010 growth of 5.5 to 6.5 percent

* Mulls tighter fiscal policy to avoid overheating

* Brazil 2010 c/a deficit likely 2.2-2.3 pct of GDP

(Recasts, adds comments from Secretary of Economic Policy)

By Isabel Versiani and Ana Nicolaci da Costa

BRASILIA, May 4 (BestGrowthStock) – Brazil’s Finance Ministry
revised higher its growth forecast for 2010 on Tuesday and said
it could tighten fiscal policy if the economy grows too fast.

Brazil’s economy will grow between 5.5 and 6.5 percent in
2010, Secretary of Economic Policy Nelson Barbosa said, raising
its projection for the year from 5.2 percent previously.

“We see an average growth of between 5 and 6 percent as
sustainable. If growth goes higher than that, you have to take
gradual measures to return it to that range,” Barbosa said at a
seminar in Brasilia.

“It could be a tighter fiscal policy to ensure economic
stability in the medium and long-term”.

Brazil was among the first to emerge from the global
financial crisis last year and is seen growing more than 6
percent this year, according to a weekly central bank survey of
local institutions.

To contain rising inflation pressures, the central bank
raised benchmark interest rates last week by an aggressive 75
basis points percent to 9.50 percent and higher-than-expected
industrial production data released earlier on Tuesday
underscored concerns the economy could be overheating. See
[ID:nN04243799]

Speaking at another event in Brasilia, Finance Minister
Guido Mantega also said on Tuesday that Brazil was prepared to
grow more.

“Brazil has already shown it can grow more than 5 percent
in a sustainable way, keeping public accounts and inflation
under control,” he added.

Economic growth was the best way to improve the country’s
public accounts, he said, adding that Brazil’s fiscal situation
was not ideal since the country still has a nominal budget
deficit.

“A big challenge for us is to achieve a nominal surplus,”
Mantega said, forecasting the latter at between 2.2 and 2.3
percent of gross domestic product in 2010.

Brazil’s budget numbers deteriorated rapidly in 2009 as the
tail-end of a brief economic recession and tax breaks to key
industry ate into public revenues.

Stock Market Investing

(Additional Reporting by Luciana Lopez in Sao Paulo;
Editing by Diane Craft)

WRAPUP 1-Brazil’s Fin Ministry ups 2010 growth forecast