The Brazilian government is cutting its economic growth forecast for this year from 4.5 per cent to three per cent due to the impact of the global slowdown.
The figure is still higher than the 2.5 per cent predicted by the Central Bank or analysts' expectations of 2.05 percent.
"On the international stage, the most recent decisions made by European leaders dispelled the risk of a banking crisis in the short-term, but the absence of growth and the reduction in trade still prevail in the advanced economies," the planning ministry said in a report on Friday.
"Brazil is prepared and in a better position compared with the major countries ... But even our country was affected by this deterioration of the international situation."
In the first quarter of the year, the GDP of Latin America's dominant power grew only 0.2 per cent compared with the previous quarter and only 0.8 per cent when compared with the same period of 2011.
Over the past few months, the government has taken a series of steps to stimulate the economy and boost growth, including lowering taxes and bringing the base interest rate to a historic low of eight per cent to spur domestic consumption.
"The recovery of growth occurs gradually, given that some various stimulus measures adopted by the authorities have yet to fully affect economic activity," the report said.
However, the government predicted that growth will accelerate in the second half of 2012, boosted by its stimulus packages.
The International Monetary Fund (IMF) earlier called on Brazil to increase productivity and rebalance domestic demand "from consumption to foster saving and provide space for investment".
Last year, the South American giant's economy, now the sixth largest in the world, grew only 2.7 per cent after a strong 7.5 per cent in 2010.
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