Thu Mar 28, 2013 8:08am EDT
BRASILIA, March 27 (Reuters) - Brazil's central bank raised its inflation forecasts for 2013 and 2014 closer to the ceiling of its official target range, reaffirming previous signals that an interest rate hike could be on its way this year.
In its quarterly inflation report released on Thursday, the bank raised its 2013 inflation forecast to 5.7 percent from 4.8 percent previously. It also increased its inflation view for 2014 to 5.3 percent from 4.9 percent previously.
That puts inflation well above the center of the official annual target range of 4.5 percent, plus or minus two percentage points, and raises pressure on Brazilian policymakers to tame price pressures.
The central bank -- in a clear change of tone from its previous report -- warned that high inflation hampers potential growth and job creation and acknowledged that the rise in consumer prices could pierce the annual target ceiling of 6.5 percent in the second quarter of this year.
The bank said it expected the economy to grow 3.1 percent this year, above the meager expansion of 0.9 percent last year, but well below the 4 percent projected by the finance ministry.
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