October 8, 2012 / 12:10 PM / 7 years ago

UPDATE 1-Economists raise Brazil 2012 inflation forecast, cut 2013 view

* Brazil 2012 inflation view rises to 5.42 pct

* Economists see no rate cut this week

* Growth outlook remained unchanged

SAO PAULO, Oct 8 (Reuters) - Economists slightly revised their estimates for inflation in Brazil, but stuck to their view that the central bank will keep its benchmark interest rate on hold at a meeting this week, an official survey showed on Monday.

That outlook for interest rates contrasts with growing market expectations for a cut this week, the tenth in a row, after comments by a central bank board member last week.

Economists raised their forecasts for inflation this year to 5.42 percent from 5.36 percent a week before, but lowered their estimates for inflation next year to 5.44 percent from 5.48 percent previously, the survey showed.

Brazil’s statistics agency IBGE last week reported the strongest inflation rate for September since 2003, with an increase of 0.57 percent from August.

Both inflation forecasts are above the center of the government’s target of 4.5 percent, but remain with its tolerance margin of two percentage points.

The poll of around 100 economists showed no other changes in forecasts for Brazil’s interest rates and economic growth.

Benchmark interest rates will be at 7.5 percent, its current level, this month and also at the end of 2012, according to the survey’s median forecast.

The bank’s monetary policy committee meets on Tuesday and Wednesday, and interest rate futures show most traders think the central bank will cut rates for the tenth time in a row, to 7.25 percent, to give the economy a further boost despite the rising inflation.

Comments by a central bank policy maker last week bolstered the expectations for a cut. Yields on interest rate futures fell sharply last week after board member Luiz Pereira said the outlook for the global economy remains shaky despite stimulus by central banks in the United States and Europe.

The central bank’s rate-setting committee meets this week. Its next decision on interest rates is due on Wednesday.

Stimulating economic growth is one of President Dilma Rousseff’s top priorities, after Brazil, Latin America’s largest economy, almost slipped into recession last year. But inflation has remained above the center of the government’s target for over two years and is expected to remain so through 2013.

The world’s sixth-largest economy is expected to grow just 1.57 percent this year, the slowest since 2009, but economists see a rebound in 2013 to 4 percent growth.

Consumer prices are expected to rise 0.50 percent in October over September, the survey added.

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