Analysts covering Brazil boosted their forecast for 2013 inflation and cut their growth estimate for the fourth straight week, as price pressures continue strong even as the economy struggles to accelerate.
Brazil’s inflation in 2013 will accelerate to 5.67 percent, according to the median estimate in a central bank survey of about 100 analysts published today. The economists had forecast 5.65 percent the previous week. Gross domestic product will expand 3.10 percent this year, the survey showed, down from 3.19 percent the previous week.
President Dilma Rousseff’s government has expanded measures aimed at spurring activity in the world’s second-largest emerging market after two years of declining growth. Increased consumption driven by tax cuts and near record-low unemployment has been overshadowed by falling investment and weak business confidence.
Economic growth slowed to 1 percent last year, the central bank estimates, following expansion of 2.7 percent in 2011 and 7.5 percent in 2010. Even so, annual inflation quickened to 6.02 percent through mid-January, the national statistics agency said Jan. 23, and has exceeded the central bank’s 4.5 percent target for the last 29 months.
Policy makers said on Jan. 24 that the balance of risks for inflation has worsened in the short term and reiterated that the best policy for bringing price increases to target is to keep rates at a record low for a “sufficiently prolonged period.”
Economists in the survey maintained their prediction for 2014 inflation at 5.50 percent and boosted their growth estimate to 3.65 percent from 3.60 percent.