Brazil 2011 inflation still seen at govt ceiling

SAO PAULO: Economists saw Brazilian annual inflation ending 2011 at the top of a government target range for the second week in a row on Monday, underscoring the persistent price pressures in Latin America's biggest economy.

In a weekly central bank survey released on Monday, analysts held their forecast for Brazil's benchmark inflation index to rise 6.5 percent this year.

The government and central bank is targeting inflation of 4.5 percent, plus or minus 2 percentage points this year.

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

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

But that expansion also pressured consumer prices, which have continued rising briskly this year. Twelve-month inflation breached the central bank's 6.5 percent target ceiling in April and has stayed above that level since.

However, inflation has begun to slow, with central bank chief Alexandre Tombini saying the 12-month rate will ease in coming months. The central bank, in fact, has begun cutting interest rates, cutting a full point off its benchmark Selic rate since August on worries the global economy will slow.

Copyright Reuters, 2011