Brazil 2011 inflation forecast tweaked higher

SAO PAULO: Economists raised their forecast for Brazil's benchmark inflation index this year to 6.38 percent from 6.31 percent previously, according to a weekly central bank survey published on Monday.

Economists forecast growth of 3.67 percent in Latin America's biggest economy this year, down from a 3.79 percent forecast in the previous survey.

Brazil's economy grew 7.5 percent last year, the fastest in 24 years and one of the most robust rates among major economies, though growth slowed in the second quarter of 2011.

The survey's predictions represent the median forecast of analysts polled by the central bank at about 100 financial institutions.

Economists have fretted that Brazil's central bank has not done enough to contain consumer prices, particularly after last week's shock move to cut the benchmark Selic rate by 0.5 percentage point. The bank is targeting a benchmark inflation rate of 4.5 percent this year, plus or minus 2 percentage points.

Economists raised their forecast for 2012 inflation to 5.32 percent from 5.20 percent. Twelve-month inflation through mid-August climbed to 7.1 percent. Government statistics agency IBGE on Tuesday will release its IPCA inflation index through the end of August.

The Selic rate should end the year at 12.38 percent, economists said, falling to 11.88 percent in 2012.

Copyright Reuters, 2011