RIO DE JANEIRO - Brazil's Gross Domestic Product (GDP) will grow less than the world average in 2011 and 2012, a report released Tuesday by the International Monetary Fund (IMF) said.

According to the report, Brazil's GDP will record an increase of 3.8 percent in 2011 and 3.6 percent in 2012, against a 4-percent world average in both years.

The forecast for 2011 showed a 0.3-percent decrease compared to the previous one released by the IMF in June, while the projection for next year remained stable.

The IMF also commented on the recent decrease in Brazil's annual basic interest rate Selic, which went down from 12.5 percent to 12 percent, saying it is necessary to wait to find out whether the measure was effective.

Moreover, the IMF said Brazil's fiscal policy is appropriate for the current economic scenario, and the recently announced changes in the country's economic policy show that the government is committed to inflation control.

However, the IMF said Brazil still has some fiscal challenges, such as the social security system.