July 21, 2014 / 12:35 PM / in 3 years

UPDATE 1-Brazil's economy seen growing less than 1 pct in 2014 - survey

(Adds details on GDP revision, background)
    By Silvio Cascione
    BRASILIA, July 21 (Reuters) - Brazil's economy will probably
grow less than 1 percent this year, edging closer to a recession
as weak confidence and higher interest rates hamper investments
and industrial output, a weekly survey of economists showed on
    Economists trimmed their forecasts for Brazil's 2014
economic growth for an eighth straight week to 0.97 percent,
from 1.05 percent in the prior week's survey. 
    The poll conducted by the central bank features the median
forecasts of about 100 financial institutions.
    Among the banks that cut their estimates for Brazil's growth
last week were Bank of America Merrill Lynch and Societe
Generale, citing low confidence among businesses and consumers
and weak industrial data. 
    Brazil, once one of the most dynamic of emerging economies,
could be in a recession already according to some analysts who
say the economy likely shrank between April and June and that
growth in the previous quarter could be revised into negative
    High inflation has been one of the main reasons for dimming
confidence among businesses. Consumer prices are expected to end
2014 near the upper limit of the central bank's target band at
6.44 percent, according to the poll. The forecast was revised
slightly down from 6.48 percent in the prior week's survey.
    Forecasts for interest rates were unchanged in the survey at
11 percent at end-2014 and 12 percent at end-2015.
    Brazil's sluggish economy could be decisive in the upcoming
October presidential elections, in which President Dilma
Rousseff will seek another four-year term. Support for her has
slipped in the last two weeks, and she is statistically tied
with her main challenger in a possible second-round runoff, a
poll released on Thursday showed. 
 (pct)                2014                 2015
                      previous   new       previous  new
                      forecast   forecast  forecast  forecast
 Consumer inflation   6.48       6.44      6.10      6.12
 Exchange rate        2.39       2.35      2.50      2.50
 (reais per U.S                                      
 dollar, end-period)                                 
 Interest rate        11.00      11.00     12.00     12.00
 GDP growth           1.05       0.97      1.50      1.50
 Industrial output    -0.90      -1.15     1.80      1.70

 (Reporting by Silvio Cascione; Editing by Chizu Nomiyama)

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