Banco Bradesco Stock- Brazil’s 2021 inflation outlook rises for 8th week, closing in on 4% -survey
BRASILIA, March 1 (Reuters) – The outlook for Brazilian inflation this year rose for an eighth straight week to a new high of 3.9%, a central bank survey of economists showed on Monday, while prospects for the real currency deteriorated.
The average forecast for IPCA consumer price inflation at the end of this year rose from 3.8% a week ago, according to the latest weekly “FOCUS” survey of over 100 economists, rising further above the central bank’s official goal of 3.75%.
The central bank’s target has a margin of error of 1.5 percentage point on either side.
A persistently weak exchange rate, strong global commodity prices and growing concerns over the government’s fiscal position are all pushing inflation expectations higher.
The FOCUS survey should economists lowering their end-2021 average forecast for the real to 5.10 per dollar from 5.05 the week before, and 5.01 two weeks ago.
The central bank last week waded into the spot currency market for the first time this year, selling more than $3 billion in four separate bouts of intervention on Thursday and Friday as the real slid to a four-month low of 5.60 per dollar BRBY.
Average interest rate expectations were unchanged, having risen sharply in recent weeks. The benchmark Selic rate, currently at a record low 2.00%, is expected to end this year at 4.00% and next year at 5.00%.
A growing number of economists expect the central bank to begin its tightening cycle as early as next month, delivering what would be the first interest rate hike in Brazil since 2015.
(Reporting by Jamie McGeever; Editing by Hugh Lawson)
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