Brazil's Gross Domestic Product (GDP) will grow 3.2 percent in 2011, a report released by Brazilian Banking Federation (Febraban) said Thursday, Xinhua informs.

In its September report, Febraban estimated that the Brazilian economy would expand 3.5 percent this year.

"It is not the first time Febraban revises down the GDP growth estimates. In August, the federation estimated the Brazilian economy would expand 3.9 percent this year."

Febraban also revised the 2012 GDP growth estimate for Brazil from 3.8 to 3.6 percent.

Febraban chief economist Rubens Sardenberg said the lower growth estimate was based on the global economic scenario and the prudential measures taken by the Brazilian government earlier this year.

Febraban's estimates are roughly the same as those released by the Organization for Economic Cooperation and Development late October. The Brazilian government, however is more optimistic, projecting a growth rate of 4 percent in 2011 and 5 percent in 2012.

Though Febraban expects the GDP growth to be lower, credit is expected to expand. According to the organization, credit in Brazil will grow 17 percent in 2011, up from 16 percent in the previous report.

In addition to credit, defaults are expected to increase 5.3 percent this year.

Febraban also believes the inflation rate will rise to 6.5 percent, the upper limit of the inflation target set for 2011. In 2012, the inflation rate will fall to 5.7 percent, Febraban said.

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