UPDATE 2-Brazil sees slight recovery next year in line with market forecasts

miércoles 15 de abril de 2015 18:25 GYT

(Adds minister comments, 2015 GDP forecast and context)

BRASILIA, April 15 (Reuters) - The Brazilian government expects the economy to grow just above 1 percent next year while inflation remains high, adopting market estimates to convince investors it is pursuing more attainable goals.

As expected the government also raised its primary budget surplus target to the equivalent of 2 percent of its gross domestic product for next year, according to its 2016 budget guidelines released by the planning ministry on Wednesday.

The government is aiming for a surplus of 1.2 percent of GDP in 2015, which many analysts say is out of reach given the economic downturn.

President Dilma Rousseff is scrambling to cut spending and raise taxes to save enough to meet the key fiscal goal and avoid losing Brazil's coveted investment-grade rating. The primary surplus, or public savings before debt interest payments, is considered a crucial gauge of a country's capacity to repay its debt.

The government estimates economic growth of 1.3 percent next year and revised down its estimate for 2015 to a contraction of 0.9 percent from a previously forecast expansion of 0.8 percent.

Planning Minister Nelson Barbosa said that a more stable local currency and rebound in local shares pointed to an economic recovery that would pick up pace in the last quarter of the year.

"We are working to bring forward the recovery for the third quarter," Barbosa told reporters.

The government forecasts inflation of 5.6 percent in 2016, well above the 4.5 percent center of the target. The central bank has vowed to bring above-target inflation back to the center of official range of between 2.5 and 6.5 percent by 2016.

The government also acknowledged that inflation will likely end this year at 8.2 percent, breaching the target ceiling for the first time in more than a decade. (Reporting by Marcela Ayres and Luciana Otoni; Writing Alonso Soto; Editing by Ted Botha)