(Updates to add economist quote in fourth paragraph.)
Feb. 25 (Bloomberg) -- Analysts covering Brazil’s economy lowered their forecasts for inflation this year for the second week, as a strengthening real may hold down import prices.
Brazil’s consumer prices will rise 5.69 percent in 2013, according to the median estimate in a central bank survey of about 100 analysts published today. Economists had forecast a 5.70 percent increase the previous week.
President Dilma Rousseff’s administration is struggling to slow inflation levels approaching the upper limit of the central bank’s target while spurring growth in the world’s second- largest emerging market. The government has cut taxes on payrolls, consumer goods and electricity, allowed the real to strengthen by 4 percent, the most among major currencies this year, and lowered the benchmark interest rate to a record 7.25 percent.
“There is some stability” in inflation expectations, Enestor Dos Santos, senior economist for Brazil at Banco Bilbao Vizcaya Argentaria SA, said in a telephone interview from Madrid. “A harsher government stance against inflation and appreciation in the currency are most likely behind the drop in expectations.”
The government’s measures have failed so far to slow inflation. Price increases in mid-February exceeded economists’ forecasts for the eighth consecutive month, while annual inflation rose to 6.18 percent. Central bank President Alexandre Tombini said on Feb. 19 that monetary policy in the world’s sixth-largest economy can shift if the inflation outlook requires. The bank targets inflation of 4.5 percent, plus or minus two percentage points.
Analysts in the survey raised their forecast for economic growth this year to 3.10 percent from 3.08 percent the previous week, the first increase since last May. They lowered their prediction for growth next year to 3.60 percent from 3.65 percent.
Brazil’s gross domestic product expanded 1 percent last year, the central bank estimated in December, after growing 2.7 percent in 2011 and 7.5 percent in 2010. Growth will reach 3 percent to 4 percent this year, according to Finance Minister Guido Mantega.
--With assistance from Dominic carey in Sao Paulo. Editor: Harry Maurer