Brazil 2021 inflation forecasts rise above Central Bank’s upper limit – FOCUS survey

RIO DE JANEIRO, BRAZIL – Forecasts for Brazil’s growth and inflation in 2021 rose to new highs, a survey of economists showed on Monday, June 7, with inflation moving further above the upper limit of the Central Bank’s target range for the year.

The median forecast for 2021 inflation from more than 100 economists in the bank’s weekly FOCUS survey rose to 5.4% from 5.3%, well above the bank’s year-end goal of 3.75% and inching further above the 5.25% upper limit of its wider range.

Following the release of stronger-than-expected first-quarter economic growth figures last week, the median 2021 growth forecast jumped to a new high of 4.4% from 4%, the survey showed. Four weeks ago, however, that stood at 3.2%.

Despite the ninth consecutive rise in the inflation outlook and the seventh weekly increase in growth forecasts, economists’ view on interest rates was unchanged. The median forecasts for the central bank’s benchmark SELIC rate held steady at 5.75% for this year and 6.50% for next year, the survey showed.

The Central Bank has raised its SELIC rate by 75 basis points at each of its last two policy meetings to 3.50% and has indicated it will do so again later this month.

(Reporting by Jamie McGeever Editing by Mark Heinrich)