BRASILIA, Sept 19 (Reuters) - Brazilian Economy Minister Paulo Guedes said on Monday that monetary tightening should be ending in the country, again predicting falling interest rates next year.
The central bank rate-setting committee meets this week after having already pushed rates to 13.75% from a record low of 2% in March 2021 to battle red-hot inflation in Latin America's largest economy.
Most market participants expect a pause in the tightening cycle, although policymakers have left the door open for a residual adjustment if needed.
"The process of raising interest rates should be ending. What we are going to see next year is possibly interest rates going down," said Guedes at a machinery industry event.
By the end of August, the minister had projected that monetary easing would kick off in the country as soon as the year turns, which would help support much higher-than-expected GDP growth in 2023.
Policymakers, however, have stressed that it is still too early to start talking about falling rates amid a battle against inflation that is not yet over.
In an interview with Brazilian radio station Guaíba earlier on Monday, Guedes also said the central bank made wrong forecasts for activity for not realizing that the government had changed the economy through market reforms, which began to attract a lot of private investment.
In December, the central bank predicted that activity this year would grow by just 1%. Its latest projection pointed to a 1.7% expansion, but Governor Roberto Campos Neto said it would be improved this month. The government forecasts a 2.7% increase in GDP.
Guedes recalled the central bank had expressed concern about the fiscal picture "all the time" last year, but stressed that he was the one worried about monetary policy at that time, when interest rates were at a lower level than inflation.
(Reporting by Marcela Ayres; Editing by Richard Chang)
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