The FINANCIAL — Financial market analysts and economists raised their forecasts for Brazil's inflation for this year and 2013, according to a survey by the Central Bank of Brazil published Monday.
According to Borsa Italiana – London Stock Exchange Group, economists now expect the country's inflation rate to average 5.12% at the end of this year, up from a forecast of 5.08% a week earlier, according to the survey. The forecast is above the central bank's inflation target of 4.5% for 2012.
Respondents also increased their inflation forecast for 2013 to 5.53% from 5.50%.
Brazil's inflation rate reached 6.50% last year, the highest since hitting 7.6% in 2004.
The central bank's weekly survey tracks the opinions of 100 analysts and economists and reports the average of their expectations.
The forecasts for the central bank's benchmark Selic interest rate at the end of 2012 and 2013 were maintained. Economists see the Selic rate for the end of 2012 at 9%, while their outlook for the end of next year remained at 10%.
In the meantime, respondents slightly raised their estimate for Brazil's 2012 gross domestic product growth to 3.22% from 3.21%. For 2013, they increased their view to an expansion of 4.30% from 4.25%.
The average expectation for Brazil's debt-to-GDP ratio at the end of this year was kept at 36.2%.
The forecast for this year's trade surplus was maintained at $19.2 billion. Analysts expect Brazil to post a current-account deficit of $68.63 billion at the end of this year.
Brazil's currency, the real, is expected to end this year at BRL1.80 to the dollar, according to the survey.
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