BRASILIA, March 26 (Reuters) - Inflation in Brazil will likely spike in 2015 despite a weakening economy, but prices will then ease toward the center of the official target next year, the central bank said on Thursday.
In its quarterly report, the bank forecast an economic contraction of 0.5 percent in 2015, closer to market expectations for negative growth of 0.83 percent this year.
The bank raised sharply its 2015 inflation forecast to 7.9 percent from 6.1 percent previously.
For 2016, the bank lowered its inflation forecast to 4.9 percent from 5 percent previously. It sees annual inflation easing further to 4.7 percent in the first quarter of 2017. The central bank aims to keep annual inflation at the center of the official range of 2.5 percent and 6.5 percent. (Reporting by Alonso Soto and Silvio Cascione)