Analysts covering Brazil lowered their forecast for growth this year and raised it for inflation, as the world’s second-biggest emerging market struggles to rebound from a slowdown that has lasted more than a year.
Brazil’s gross domestic product will expand 3.26 percent this year, according to the median estimate in a central bank survey of about 100 analysts published today, down from 3.3 percent the previous week. Inflation this year will reach 5.49 percent, up from the previous week’s estimate of 5.47 percent. Economists also boosted their 2012 inflation forecast for the fifth straight week to 5.73 percent from the previous estimate of 5.71 percent, the survey showed.
President Dilma Rousseff’s administration has injected a series of stimuli into Brazil’s $2.5 trillion economy, which economists forecast will grow this year the slowest among the BRIC group, which includes Russia, India and China. Meanwhile the central bank has cut the benchmark Selic rate by 525 basis points, the most of any Group of 20 nation, to a record 7.25 percent.
Economists in the survey maintained their estimate that gross domestic product grew 0.98 percent in 2012, its worst performance since 2009. The economy grew 2.7 percent and 7.5 percent in 2011 and 2010, respectively.
Brazil’s Finance Minister Guido Mantega said on Dec. 27 that the economy will grow 3 percent to 4 percent this year.