* Brazil 2011 inflation seen 6.16 pct vs 6.18 pct before
* Brazil Selic rate seen at 12.50 percent at 2011 end
* 2012 inflation seen at 5.15 pct vs 5.18 pct previously
(Rewrites, adds details, background)
SAO PAULO, June 27 (Reuters) - Economists lowered their views for inflation this year and next in Brazil but saw higher interest rates by the end of 2012, according to a weekly central bank survey published on Monday.
Local analysts forecast the benchmark IPCA consumer price index would end 2011 at 6.16 percent, down from a forecast of 6.18 percent last week. The economists saw the 2012 IPCA at 5.15 percent, down from 5.18 percent previously.
The view for the benchmark Selic interest rate held to an increase to 12.50 percent to end 2011. The forecast was also 12.50 percent to end 2012, up from last week’s outlook for the Selic to end the year at 12.25 percent.
The higher interest rate forecast underscores worries about Latin America’s largest economy and its struggles with inflation. While government officials have said they want to bring Brazilian interest rates, currently among the world’s highest in major economies, in line with global peers, stubborn inflation makes that difficult.
The central bank has raised the Selic rate four times so far this year, by 150 basis points total, including a 25-basis-point hike in June to the current 12.25 percent.
Policymakers this year are targeting inflation of 4.5 percent, plus or minus 2 percentage points. While 12-month inflation has breached that target, inflation has begun to slow, and analysts see the 12-month rate dropping later in the year.
A number of large emerging economies, such as China and India, have been grappling with the rising inflation rates that come with brisk growth, even as much of the developed world continues to try to stoke anemic growth.
In Latin America, however, inflation has slowed, and some analysts say interest rates are close to peaking. Peru’s central bank earlier this month paused a tightening cycle, and Chile has slowed the pace of interest rate hikes.
In Brazil, inflation is also a political worry, with voters well remembering years of runaway prices in previous decades. The recent bout of inflation has threatened to erode the clout of President Dilma Rousseff as she tries to advance reforms such as a tax overhaul in her first year in office.
To read the Focus survey, click on: here (Reporting by Daniela Machado and Luciana Lopez; Editing by Padraic Cassidy)