SAO PAULO (Reuters) - Economists cut their forecasts for economic growth in Brazil this year for the eighth straight week, to 2.05 percent from 2.18 percent, a central bank survey showed on Monday.
The outlook for Brazil’s benchmark IPCA inflation rate in 2012 eased to 4.93 from 4.95 percent a week earlier, according to the survey, which tracks weekly forecasts of the most-widely watched economic indicators in Brazil.
The world’s No.6 economy grew a slower-than-expected 0.2 percent in the first quarter from the fourth quarter last year as the nation’s businesses, faced with a decline in global demand and higher labor costs, cut back on expansion and investments.
Lower inflation should lead to further interest rate cuts, the economists said. The country’s benchmark interest rate is expected to end this year at an all-time low of 7.5 percent, down from the current 8.5 percent and unchanged from last week’s forecasts, rising back to 9 percent by end-2013.
The survey’s results are the median forecast of analysts polled by the central bank at about 100 financial institutions.
The central bank targets inflation of 4.5 percent annually, with a tolerance range of plus or minus 2 percentage points.
Analysts foresee prices rising 5.50 percent by the end of next year, unchanged from last week’s prediction.
Consumer prices were seen rising 0.17 percent in June from the previous month. Brazil’s national statistics agency IBGE will release official inflation figures for June on July 6.
For the central bank's survey, click on: here
Reporting by Silvio Cascione Editing by W Simon