Analysts covering Brazil’s economy raised their forecast for the benchmark rate at year-end, as policy makers seek to control accelerating annualized inflation in the world’s second-biggest emerging market.
Brazil’s Selic rate will be 8.50 percent at the end of this year, according to the median estimate in a central bank survey of about 100 analysts published today. Analysts had forecast 8.25 percent the previous week. The rate will be 8.50 percent at year-end 2014, the survey showed.
Brazil’s economy has reacted slowly to stimulus aimed at spurring the slowest growth among major emerging markets while cooling inflation. After gross domestic product grew by 0.9 percent last year, measures including tax cuts and record-low interest rates have helped drive recent retail sales and industrial output above forecasts. Brazil may require additional measures to slow inflation levels approaching the upper limit of the central bank’s target range, bank President Alexandre Tombini said on March 22.
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