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Analysts expect deeper economic contraction in Brazil

Analysts expect deeper economic contraction in Brazil

Posted by Juan Gavasa on March 09, 2015

Private sector analysts have revised their 2015 economic outlook for Brazil downward, estimating that Latin America's largest economy will contract by 0.66 percent, the Central Bank said Monday.

This was the 10th downward revision of the gross domestic product (GDP) made by analysts polled for the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy.

Most analysts estimate that the economy contracted about 0.15 percent last year, marking the first contraction in Brazil since 2009. The Brazilian Institute of Geography and Statistics, or IBGE, will release the official 2014 GDP number on March 27.

Analysts surveyed for the Boletin Focus expect Brazil to finish 2015 with an inflation rate of 7.77 percent, revising their estimates upward for the 10th straight week.

Last week's edition of the Boletin Focus projected an economic contraction of 0.58 percent and an inflation rate of 7.47 percent in 2015. Brazil registered an inflation rate of 2.48 percent during the first two months of this year, with the year-on-year rate running at 7.7 percent, the highest level in 10 years.

The government has an inflation target of 4.5 percent for the year, with a 2 percent band. Brazil finished 2014 with an inflation rate of 6.41 percent, well above the 5.91 percent rate registered in the prior year but below the top end of the government's range.

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