Brazil inflation forecasts up, growth seen slower

SAO PAULO: Economists raised their forecast for inflation and revised downwards their outlook for economic growth in Brazil in 2011 and 2012 as economic concerns mount at home and abroad, according to a weekly central bank survey published on Monday.

Analysts raised their 2012 inflation view to 5.5 percent from 5.4 percent in the prior weekly survey. The 2011 forecast edged up to 6.46 percent from a previous 6.45 percent.

At the same time, the economists lowered their outlooks for gross domestic product growth. This year they forecast 3.52 percent expansion, down from expectations of 3.56 percent. For next year, the forecast was 3.7 percent, down from 3.8 percent.

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

Economists have fretted Brazil is not doing enough to rein in inflation. At the close of last month, the central bank cut its benchmark interest rate to 12 percent from 12.5 percent, citing a slowdown in the global economy.

But many analysts said the cut was premature, particularly as 12-month inflation is currently running above a 6.5 percent government target ceiling.

Abroad, major global economies such as the United States and the euro zone have found themselves facing the possibility of re-entering recession, which would drag on global growth.

Copyright Reuters, 2011