BRASILIA, March 27 Brazil's central bank sharply
raised its forecast for inflation in 2014 and sees the economy
growing at a moderate pace, signaling it may prolong its
rate-hiking cycle to battle naggingly high inflation in an
The central bank hiked its 2014 inflation forecast to 6.1
percent from a previous estimate of 5.6 percent as a severe
drought in southern Brazil hits crops and pushes up food prices.
In its quarterly inflation report released on Thursday, the
bank also raised its estimate for inflation in 2015 to 5.5
percent from 5.4 percent, highlighting the price stickiness that
has worried investors for the last three years.
(Reporting by Silvio Cascione and Alonso Soto; Editing by Chizu