Brazil economists raised their forecast for benchmark interest rates this year as policy makers in the world’s second-largest emerging market combat the fastest inflation in more than a decade.
Analysts raised their 2014 forecast for the Selic rate to 10.75 percent from 10.5 percent last week and increased inflation forecasts for the year to 6.01 percent from 6 percent, according to the Jan. 17 central bank survey published today.
Analysts maintained estimates that benchmark borrowing costs will reach 11.5 percent by the end of next year.
The central bank last week surprised analysts polled by Bloomberg and lifted the benchmark rate by a half-point to 10.5 percent after consumer prices jumped the most in more than a decade.
Inflation capped 2013 above the central bank’s official target for the fourth straight year, damping consumer and business confidence.
Swap rates on the contract due in January 2016 rose three basis points, or 0.03 percentage point, to 11.75 percent at 9:00 a.m. local time. The real strengthened by 0.1 percent to 2.3396 per U.S. dollar.
Policy makers have boosted borrowing costs by 0.5 percentage point in their past six meetings following a 0.25 percentage point increase in April.
The median estimate of analysts polled by Bloomberg was for a quarter-point boost last week to 10.25 percent.
Exceeding Estimates
Annual inflation in 2013 accelerated to 5.91 percent from 5.84 percent the year prior, exceeding every analyst estimate in a Bloomberg survey.
Monthly price increases accelerated to 0.92 percent from 0.54 percent in November, also higher than all forecasts and the fastest increase since April 2003. Brazil’s central bank targets annual inflation of 4.5 percent, plus or minus two percentage points.
Analysts in the central bank survey raised their 2015 inflation estimate to 5.6 percent from 5.5 percent. The survey shows the median estimate of about 100 analysts.
The economy in November as measured by the central bank index fell 0.31 percent from the month prior as industrial output dropped for the first time since July.
The central bank on Dec. 20 cut its 2013 growth estimate to 2.3 percent from 2.5 percent after gross domestic product fell 0.5 percent in the third quarter on a drop in investments.
bloomberg.com
Analysts raised their 2014 forecast for the Selic rate to 10.75 percent from 10.5 percent last week and increased inflation forecasts for the year to 6.01 percent from 6 percent, according to the Jan. 17 central bank survey published today.
Analysts maintained estimates that benchmark borrowing costs will reach 11.5 percent by the end of next year.
The central bank last week surprised analysts polled by Bloomberg and lifted the benchmark rate by a half-point to 10.5 percent after consumer prices jumped the most in more than a decade.
Inflation capped 2013 above the central bank’s official target for the fourth straight year, damping consumer and business confidence.
Swap rates on the contract due in January 2016 rose three basis points, or 0.03 percentage point, to 11.75 percent at 9:00 a.m. local time. The real strengthened by 0.1 percent to 2.3396 per U.S. dollar.
Policy makers have boosted borrowing costs by 0.5 percentage point in their past six meetings following a 0.25 percentage point increase in April.
The median estimate of analysts polled by Bloomberg was for a quarter-point boost last week to 10.25 percent.
Exceeding Estimates
Annual inflation in 2013 accelerated to 5.91 percent from 5.84 percent the year prior, exceeding every analyst estimate in a Bloomberg survey.
Monthly price increases accelerated to 0.92 percent from 0.54 percent in November, also higher than all forecasts and the fastest increase since April 2003. Brazil’s central bank targets annual inflation of 4.5 percent, plus or minus two percentage points.
Analysts in the central bank survey raised their 2015 inflation estimate to 5.6 percent from 5.5 percent. The survey shows the median estimate of about 100 analysts.
The economy in November as measured by the central bank index fell 0.31 percent from the month prior as industrial output dropped for the first time since July.
The central bank on Dec. 20 cut its 2013 growth estimate to 2.3 percent from 2.5 percent after gross domestic product fell 0.5 percent in the third quarter on a drop in investments.
bloomberg.com
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