Brazil’s central bank cut its economic growth outlook and raised the inflation forecast for this year, as the outlook for South America’s largest economy worsened in the past three months, The Wall Street Journal reported.

The bank said in its quarterly report published on Wednesday that Brazil’s gross domestic product would contract 1.1 percent in 2015, compared with a decline of 0.5 percent mentioned in the previous estimate.

The central lender also raised the inflation outlook for this year to 9 percent from a prediction three months ago of 7.9 percent.

“We need to persevere with the fiscal and monetary policies under way,” said Luiz Awazu Pereira da Silva, the central bank’s director of economic policy, in a press conference on Wednesday. “We reiterate our determination to fight inflation in the short-, medium- and long-term”, he added.

Earlier this month, the central bank raised the nation’s interest rate to 13.75 percent from 13.25 percent, when the inflation level kept soaring. The bank’s goal is to slow the inflation level to 4.5 percent by the end of 2016, but the April level remained at 8.2 percent, according to the report.