Analysts covering Brazil’s economy raised their forecast for GDP growth this year to 7.34%, according to a Brazilian central bank survey. Economists held their 2011 economic growth forecast unchanged at 4.5%, according to the median estimate in a survey of 100 analysts taken September 3 and published Monday.
Analysts raised their outlook for annual inflation, as measured by the benchmark IPCA index, to 5.03%, from 4.99% a week earlier. The forecast exceeds the government’s 4.5% inflation target.
Monetary policy makers are likely to keep the benchmark lending rate in Latin America’s biggest economy unchanged at 10.75% through year end and boost the rate to 11.5% by the end of 2011, the survey showed.
Brazil’s economy grew 1.2% in the three months through June from the previous quarter, compared with a 2.7% expansion in the first quarter, the national statistics agency said last week. GDP grew 8.8% from a year earlier.
The central bank last week voted to hold the benchmark interest rate unchanged at 10.75%, citing lower inflation risks as economic growth slowed from its fastest pace in 15 years during the first quarter.
Brazilian central bank President Henrique Meirelles said he’s “comfortable” with the current pace of economic growth, adding that expansion will slow to a level consistent with long-term equilibrium.
Meirelles said GDP will expand an average 0.7% over the next two quarters.
“The central bank is comfortable with this growth, which is absolutely in line with predictions,” Meirelles told reporters in Brazilian capital Brasília. “We expect, looking ahead, moderate growth in the third and fourth quarters, leading to a level of economic growth around its long-term equilibrium rate.”
Meirelles reiterated the central bank’s forecast that Latin America’s biggest economy will grow 7.3% this year.