Brazil Analysts Raise 2010 Growth Forecast to 7.34%

Sept. 6 2010

Analysts covering Brazil's economy raised their forecast for gross domestic product growth this year to 7.34 percent, according to a central bank survey.

Economists held their 2011 economic growth forecast unchanged at 4.5 percent, according to the median estimate in a survey of 100 analysts taken Sept. 3 and published today. Last week, the analysts predicted 2010 expansion of 7.09 percent.

Analysts raised their outlook for annual inflation, as measured by the benchmark IPCA index, to 5.03 percent, from 4.99 percent a week earlier. The forecast exceeds the government's 4.5 percent inflation target.
Monetary policy makers are likely to keep the benchmark lending rate in Latin America's biggest economy unchanged at 10.75 percent through year end and boost the rate to 11.5 percent by the end of 2011, the survey showed.

Brazil's economy grew 1.2 percent in the three months through June from the previous quarter, compared with a 2.7 percent expansion in the first quarter, the national statistics agency said Sept. 3. GDP grew 8.8 percent from a year earlier.

The real strengthened 0.3 percent to 1.7281 per dollar at 8:44 a.m. New York time.

The central bank last week voted to hold the benchmark interest rate unchanged at 10.75 percent, citing lower inflation risks as economic growth slowed from its fastest pace in 15 years during the first quarter.

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