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