Reuters: US Dollar Report: UPDATE 1-Economists up Brazil 2012 inflation view on mid-July spike

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UPDATE 1-Economists up Brazil 2012 inflation view on mid-July spike Jul 23rd 2012, 12:04 Mon Jul 23, 2012 8:04am EDT * Analysts keep estimate for Selic rate at 7.5 pct * Growth estimate kept at 1.9 pct for this year By Silvio Cascione SAO PAULO, July 23 (Reuters) - Economists raised their forecasts for Brazil's inflation this year following a surprise increase in consumer prices in the month to mid-July, a central bank survey showed on Monday. The outlook for economic growth and interest rates remained unchanged, according to the survey, which tracks weekly forecasts of the most widely watched indicators in Brazil. Economists raised their forecasts for inflation this year to 4.92 percent from 4.87 percent in the prior week. Consumer prices, as measured by the benchmark IPCA index, rose faster than expected in the month to mid-July on higher food costs. In 2013, prices are seen rising faster with the IPCA index seen accelerating to 5.50 percent, unchanged from last week's prediction. That is still within the central bank target of 4.5 percent plus or minus 2 percentage points. The outlook for Brazil's economic growth in 2012 remained at 1.9 percent, according to the survey. That would be the weakest growth in the world's No.6 economy since 2009, when it contracted slightly, and a far cry from the 7.5 percent boom seen in 2010. Authorities are slightly more upbeat, with the Finance Ministry forecasting 3 percent growth this year. The official estimate was revised down last week from 4.5 percent previously. Analysts also kept unchanged their view on the next monetary policy move. The central bank is forecast to cut interest rates to a new record low of 7.5 percent in August and then stop to assess if the economy improves as expected. The survey's results are the median forecast of analysts polled by the central bank at about 100 financial institutions. Consumer prices were seen rising 0.25 percent in July from the previous month, up from a prior week's estimate of 0.21 percent. Link this Share this Digg this Email Reprints

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