Brazil 2016 Inflation Estimates Plunge After CPI Surprise

  • Inflation outlook for 2017 little changed, weekly survey shows
  • Economists keep forecast for benchmark Selic rate unchaged

Brazil economists sharply cut their forecasts for this year’s inflation after the benchmark IPCA consumer price index came in way below expectations last week, rising at its slowest pace in over two years.

Economists surveyed weekly by the central bank now see consumer prices rising 7.04 percent in 2016, down from 7.23 percent in the previous poll. Their estimate for 2017 inflation was little changed, however: to 5.06 percent from 5.07 percent. Expectations for the benchmark Selic rate remained at 13.75 percent for the end of 2016 and 11 percent for the end of 2017.

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