Brazilian president denies risk of high inflation rate

Brazilian President Luiz Inacio Lula da Silva said on Thursday that he does not believe that the high demand in the domestic market will cause the country's inflation rate to rise too much this year.

Even if the local industry fails to answer to the high demand, that can be compensated by importing more products, said Lula.

"I think Brazil still has room for growth," he said after a meeting of the Economic and Social Development Council (CDES), in Brasilia.

Lula assured that the government will monitor the demand situation in order to avoid a high inflation rate or a yo-yo effect, when a country registers high and low growth rates interpolated.

"I do not want Brazil having a yo-yo effect, growing 10 percent in a year and two in the next," the president said. "If we grow five or six percent a year during several years, in a sustainable manner, this country will undergo an extraordinary revolution."

The president also warned that he will not determine any more rises this year. Earlier in the week, Lula granted a 7.7 percent rise to the retirement pensions. According to Finance Minister Guido Mantega, the measure will have an impact of 1.6 billion reais (893 million U.S. dollars) in the public accounts in 2010.

Source:Xinhua