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SAO PAULO, March 28 (Reuters) - Brazil will close 2014 with an inflation rate that falls within the central bank’s target range and achieve its fiscal savings goal for the year, Finance Minister Guido Mantega said on Friday.
Inflation reached 5.68 percent on an annual basis in February, near the top of the central bank’s target range of 4.5 percent plus or minus two percentage points. Price increases in the month were led by a sharp, seasonal hike in school tuition and higher home appliances and furniture prices.
“The tolerance band of the goal serves to absorb price impacts and this year inflation will not surpass the limits of the goal, despite the inflation pressures that have been occurring at the beginning of the year,” Mantega said in a seminar at Sao Paulo’s Getulio Vargas Foundation business school.
Mantega also reiterated the government’s commitment to strong fiscal and monetary fundamentals.
Data released earlier on Friday showed that Brazil avoided a primary budget deficit in February, contrary to most market expectations, a small step forward in its efforts to shore up public finances and regain credibility with investors.
For the next eight years Mantega forecast an average annual economic growth rate of 4 percent, with investment growing 7 percent a year on average, and consumption growing at a 3.6 percent rate. (Reporting by Tiago Pariz; Writing by Asher Levine; Editing by Stephen Powell)