The Brazilian government said it was cutting its economic growth forecast for this year from 4.5 percent to three percent due to the impact of the global slowdown.
The figure was still higher than the 2.5 percent 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 released 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 percent compared with the previous quarter and only 0.8 percent 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 percent 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 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 percent after a strong 7.5 percent in 2010.