FILE PHOTO: A drone view shows the fish market at the food distribution center of the warehouse and general stores company CEAGESP, in Sao Paulo, Brazil August 5, 2025. REUTERS/Jorge Silva/File Photo

BRASILIA (Reuters) -Brazil's Finance Ministry on Thursday trimmed its 2025 economic growth forecast to 2.2% from 2.3%, citing weaker than previously expected third-quarter results that also weighed on its outlook for the final three months of the year.

Latin America's largest economy has been slowing after an aggressive monetary tightening cycle carried out by the central bank in a bid to bring inflation back to its 3% target, plus or minus 1.5 percentage points.

Policymakers at the bank halted in July a rate-hiking cycle that had lifted borrowing costs by a total 450 basis points since September 2024, bringing the benchmark Selic interest rate to 15%, a near two-decade high.

"This slowdown was already expected, reflecting the lagged and cumulative effects of the restrictive monetary policy currently in place," the ministry's economic policy secretariat said in a report.

The ministry cut its 2025 inflation projection to 4.6% from 4.8%, still above the official goal, citing a stronger Brazilian real, lower wholesale agricultural and industrial inflation, and global oversupply of goods amid trade disputes.

In the 12 months through October, Brazil's benchmark IPCA consumer price index rose 4.68%, according to government statistics agency IBGE.

"We are ending 2025 with results very similar to what we expected at the beginning of the year," Economic Policy Secretary Guilherme Mello told a press conference.

The government kept its GDP growth forecast for next year unchanged at 2.4%, saying that expansion in industry and services should more than offset a slowdown in agricultural activity. It cut its 2026 inflation estimate to 3.5% from 3.6%.

Mello said he expects the central bank to start an easing cycle next year, which should help support economic growth.

(Reporting by Isabel Versiani and Bernardo Caram; Writing by Isabel Teles and Fernando Cardoso; Editing by Gabriel Araujo)