World Economic outlook - Economists raised Brazil inflation rate forecast 2013 : Economists covering Brazil raised their forecast for inflation next year for the first time in 12 weeks, after retail sales grew more than expected and the central bank signaled further interest rate cuts.
Consumer prices will increase 5.02 percent next year, from a forecast of 5.00 percent the previous week, according to the median forecast in a Feb. 17 central bank survey of about 100 economists published today. Consumer prices, as measured by the IPCA index, will rise 5.24 percent this year, from a week earlier forecast of 5.29 percent, the survey found.
Economists expect policy makers to cut the benchmark rate half a percentage point, to 10 percent, at the March policy meeting, and to 9.5 percent by the end of the year, the survey found. The economy’s recent “below potential” growth has opened up space for further rate cuts without stoking inflation, central bank President Alexandre Tombini said in Mumbai this month.
Economists held their estimate for economic growth this year at 3.3 percent. Latin America’s largest economy will expand 4.1 percent next year, also unchanged from the previous week’s forecast, according to the survey.
Consumer prices rose less than economists expected through mid-February, taking the mid-month inflation rate below 6 percent for the first time since December 2010. Brazil targets consumer price rises of 4.5 percent, plus or minus two percentage points. Inflation exceeded the upper limit of the target for eight months last year.
Retail sales rose 6.7 percent in December from a year earlier, higher than the 6.0 percent median forecast in a Bloomberg survey of 40 analysts
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