Brazil analysts raised their 2016 inflation forecast for the first time in 20 weeks as the real weakens.
Analysts forecast annual inflation will reach 5.43 percent at the end of next year, up from 5.40 percent the prior week, according to the Aug. 7 central bank survey of about 100 analysts published Monday. They forecast the real will finish 2015 at 3.4 per dollar, compared with a previous estimate of 3.35 per dollar.
Brazil’s borrowing costs are now at their highest in nine years to rein in inflation that’s more than double the central bank’s 4.5 percent target. Economists forecast Latin America’s biggest economy will contract 1.97 percent this year and remains stagnant next year, the survey shows.
The central bank has boosted the benchmark interest rate in seven straight meetings to 14.25 percent, most recently by 50 basis points in July. Policy makers signaled in their last meeting that borrowing costs are high enough to slow inflation toward its target by year-end 2016.
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