SAO PAULO: Economists raised their 2017 inflation outlook for Brazil, as they expect the central bank to reduce its benchmark interest rate against the backdrop of a struggling domestic economy. Brazil’s inflation rate, measured by the official consumer price index, is expected to end this year at 4.87%, according to a weekly central-bank survey of 100 economists, compared with the 4.85% forecast in last week’s survey. In 2016, the rate of inflation ended at a projected level of 6.38%, the survey showed.
Brazil’s gross domestic product is expected to expand 0.50% in 2017, compared with a projected contraction of 3.49% in 2016, according to the survey. Economists reduced their outlook for the 2017 year-end benchmark interest rate, or Selic, to 10.25% from 10.50% in the prior week’s survey. Currently, the Selic is at 13.75%. They also forecast Brazil to post a $46.98 billion trade surplus this year, up from the $46.85 billion expected in the previous week’s survey.