January 28, 2013 / 10:56 AM / in 5 years

UPDATE 2-Economists cut Brazil 2013 GDP growth view to 3.1 pct

* 2013 inflation view slightly up to 5.67 pct
    * Interest rates seen on hold at record low this year

    SAO PAULO, Jan 28 (Reuters) - Economists trimmed their
forecasts for Brazil's economic expansion this year for the
fourth straight week to 3.10 percent, a weekly central bank
survey showed on Monday.
    The median forecasts in the central bank poll of nearly 100
economists also showed a slight upward revision in 2013
inflation forecasts, to 5.67 percent from 5.65 previously.
    The survey results add to evidence of a deteriorating
trade-off for the central bank, which slashed interest rates to
a record low last year but has failed to quickly revive economic
growth and has seen inflation expectations drift higher.
    The government targets inflation at 4.5 percent, with a
tolerance margin of 2 percentage points in either direction.
     Brazil's economy was seen having grown 0.95 percent last
year, according to the median forecast in the poll.
     In the minutes of its latest monetary policy meeting,
released last week, the central bank said the economic recovery
has been surprisingly slow because of supply bottlenecks, which
can not be addressed with monetary policy measures. That was
seen by investors as a clear sign that further rate cuts are
unlikely, even if the economy continues to post
weaker-than-expected economic growth. 
    Economists kept their year-end estimates for the level of
the benchmark overnight lending Selic rate at 7.25 percent for
the eleventh straight week.
    The central bank survey also showed an upward revision in
forecasts for the monthly inflation rate in January, to 0.85
percent from 0.81 percent previously. Brazil's statistics agency
IBGE releases the January data for its IPCA inflation gauge on
Feb. 7.
    According to the survey, economic growth in 2014 should
accelerate to 3.65 percent, slightly up a previous forecast of
3.60 percent. Inflation estimates for 2014 remained stable at
5.50 percent for an eleventh consecutive week.
 (pct)                2013                 2014
                      previous   new       previous  new
                      forecast   forecast  forecast  forecast
 Consumer inflation   5.65       5.67      5.50      5.50
 Exchange rate        2.08       2.07      2.09      2.09

 Interest rate        7.25       7.25      8.25      8.25

 GDP growth           3.19       3.10      3.60      3.65
 Industrial output    3.24       3.10      3.90      3.70

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