Aug. 25 (Bloomberg) -- Brazilian inflation forecasts for 2008 and the next 12 months fell for a fourth straight week in a central bank survey of economists.

The benchmark IPCA consumer price index will end 2008 at 6.34 percent, less than the 6.44 percent forecast made a week earlier, according to the Aug. 22 survey of about 100 economists published today on the bank's Web site. The central banktargets inflation of 4.5 percent, plus or minus 2 percentage points.

Analysts covering Latin America's biggest economy forecast that inflation will slow to within the central bank's target range in 2008 because of interest rate increases and falling commodity prices, said Flavio Serrano, senior economist at Banco Espirito Santo de Investimento SA, in Sao Paulo.

``There are clear signs that inflation in the short-term is cooling,'' said Serrano in a phone interview. ``But we need to see more solid indicators, such as slower economic activity and industrial output, to cut the 2009 inflation estimate.''

The annual inflation rate 12 months from now will be 5.25 percent, down from a forecast of 5.31 percent a week earlier, the survey showed.

The economy will expand 3.65 percent next year, compared to a forecast of 3.70 percent made a week earlier, representing a third consecutive decline, the survey showed. The industrial output forecast for 2009 was unchanged at 4.23 percent.

The real strengthened 0.3 percent to 1.6222 per dollar at 9:21 a.m. New York time from 1.6270 late Aug. 22, paring its decline this month to 3.5 percent. The real is up 9.7 percent this year, the best performance against the dollar among the 16 most-traded currencies worldwide.

To contact the reporter on this story: Katia Cortes in Brasilia at at kcortes@bloomberg.net

Last Updated: August 25, 2008 09:31 EDT