Brazil government think tank ups 2007 GDP outlook

BRASILIA, April 20 (Reuters) - A leading government think tank raised its estimate for Brazil's 2007 gross domestic product growth to 4.2 percent on Friday, just weeks after the government broadened its methodology for calculating GDP to bring it in line with international standards.

The IPEA, an economic research institute linked to Brazil's Planning Ministry, previously forecast the economy would expand 3.7 percent this year.

Other economists are also raising their forecasts for GDP growth following the change in methodology. A weekly central bank survey released Monday showed that on average market economists now expect Brazil to grow 4.0 percent this year, up from 3.5 percent a month ago.

A leading industry lobby known as the National Industrial Confederation raised its growth forecast on Friday, predicting a 4.2 percent annual expansion in 2007.

The IPEA raised its growth forecast for the agricultural sector to 6 percent from 4.4 percent, citing a strong outlook for grains production and a recovery in output of animal products. Brazil is the world's largest exporter of beef and chicken and is second to the United States in soy exports.

The IPEA said it maintained a positive outlook for 2007 industrial activity, but its industrial growth forecast was unchanged at 4.8 percent.

It forecast solid growth especially in the production of capital and consumer goods and predicted sustained growth in domestic demand.