January 27, 2020 / 12:35 PM / 2 months ago

Brazil 2020 rate outlook dips to 4.25%, inflation to new low - central bank survey

BRASILIA, Jan 27 (Reuters) - The Brazilian central bank’s benchmark interest rate is expected to fall to 4.25% by year end, the bank’s latest weekly survey of economists showed on Monday, while inflation forecasts declined for the fourth week in a row to a new low.

The dip in economists’ end-year forecasts from the record low of 4.50% marked the first decline in over two months. Inflation is now seen ending the year at 3.47%, more than half a percentage point below the central bank’s official 4.00% target.

Central bank President Roberto Campos Neto said last week that policymakers are “comfortable” with the inflation outlook, noting that a surge in meat prices late last year is likely to dissipate as quickly as it emerged.

The bank’s rate-setting committee, known as Copom, next meets on Feb. 4-5. Inflation ended last year above target but is expected to undershoot this year’s 4.00% goal, while growth should exceed 2.0% this year, although some data in the fourth quarter of last year pointed to a loss of momentum.

Reporting by Jamie McGeever, editing by Larry King

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