UPDATE 1-Brazil's economy to shrink 3 pct this year, recover feebly- poll

lunes 11 de enero de 2016 09:11 GYT

(Adds background, forecast made in 2015)
    BRASILIA, Jan 11 (Reuters) - Economists downgraded their
outlook for Brazil's economy in 2016 and 2017, a weekly survey
by the central bank showed on Monday, projecting a slower
recovery from what is already set to be the country's worst
recession ever.
    The median estimate of about 100 analysts at financial
institutions projected a contraction of 2.99 percent in Brazil's
gross domestic product in 2016, down from a previous forecast of
2.95 percent. That follows an estimated drop of nearly 4 percent
in 2015. 
    Brazil's economy is expected to grow just 0.86 percent in
2017, down from a previous estimate of 1.00 percent, the poll
    Brazil has not had two consecutive years of such intense
downturn since at least 1901, according to historical data by
the national economic research institute IPEA. 
    Latin America's largest economy has nosedived after a
ballooning budget deficit and high inflation prompted President
Dilma Rousseff and the central bank to raise taxes, cut spending
and jack up interest rates last year. 
    Rousseff's popularity collapsed, leading to a political
crisis that paralysed investments as business confidence tanked.
    The economy has also been dragged down by a massive
corruption scandal at state-run oil firm Petroleo Brasileiro SA
, one of the country's largest companies, as it
struggled with a drop in global oil prices. 
    Executives from top construction, engineering and financial
companies are under investigation or in jail. 
    The central bank poll also showed a slight increase in
inflation expectations for 2016, suggesting the central bank
will overshoot for as second straight year even as it is
expected to raise interest rates to 15.25 percent from a current
nine-year high of 14.25 percent.
 (pct)                2016                 2017
                      previous   new       previous  new
                      forecast   forecast  forecast  forecast
 Consumer inflation   6.87       6.93      5.20      5.20
 Exchange rate        4.21       4.25      4.20      4.23
 (reais per U.S                                      
 dollar, end-period)                                 
 Interest rate        15.25      15.25     12.50     12.75
 GDP growth           -2.95      -2.99     1.00      0.86
 Industrial output    -3.50      -3.45     2.00      1.98
 (Reporting by Silvio Cascione; Editing by Daniel Flynn and
Chizu Nomiyama)