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UPDATE 1-Analysts cut Brazil growth forecasts as outlook turns murkier
December 3, 2012 / 10:56 AM / in 5 years

UPDATE 1-Analysts cut Brazil growth forecasts as outlook turns murkier

* Downward revision follows weak Q3 GDP figures
    * Outlook for rates, inflation stays unchanged

    SAO PAULO, Dec 3 (Reuters) - Economists slashed forecasts
for Brazil's economic expansion for this and next year, a weekly
central bank survey showed on Monday, reflecting the impact of
underwhelming quarterly growth figures last week.
    Respondents to the central bank's weekly Focus survey expect
growth this year to come in at a median 1.27 percent from 1.50
percent the prior week. Estimates for growth in 2013 came in at
3.70 percent, down from 3.94 percent the previous week.
    Brazil's economy grew just 0.6 percent in the third quarter
on a sequential basis, half the pace expected by financial
markets, data showed last week. 
    Despite efforts by President Dilma Rousseff to spur growth
through tax and interest-rate reductions, controls on imports
and credit incentives, Brazil's economy will likely post
below-trend expansion numbers for a second straight year. The
central bank more than halved its own growth forecast to 1.6
percent in September from 3.5 percent at the beginning of the
    The forecasts represent the median of predictions from about
100 financial institutions surveyed weekly by the central bank. 
    Forecasts for the central bank benchmark interest rate at
the end of 2012 and 2013 remained unchanged at the current level
of 7.25 percent, a record low.
    Consumer inflation over a 12-month period is expected to end
this year at 5.43 percent, unchanged from the prior week's
survey. In 2013, it is seen at 5.40 percent, also unchanged.
    The government targets inflation at 4.5 percent, with a
tolerance margin of 2 percentage points.previous   new       previous  new
                 forecast   forecast  forecast  forecast
 Consumer             5.43      5.43      5.40      5.40
 Benchmark rate       7.25      7.25      7.25      7.25
 GDP growth           1.50      1.27      3.94      3.70

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