Brazil 2021 inflation, growth, interest rate forecasts hit new highs -survey
BRASILIA, June 21 (Reuters) - Forecasts for Brazilian growth, inflation and interest rates in 2021 rose to new highs, a survey of economists showed on Monday, following the central bank's third rate hike last week and indication that it could quicken the pace of tightening.
The median forecast for 2021 inflation from more than 100 economists in the central bank's weekly FOCUS survey rose to 5.9% from 5.8%, more than two percentage points above the bank's year-end goal of 3.75% and well above the 5.25% upper limit of its wider range.
It marked the 11th consecutive weekly rise in inflation forecasts for this year.
To prevent inflation expectations for next year running away, the central bank last week raised its benchmark Selic rate by 75 basis points to 4.25%, and dropped its commitment to only a "partial" normalization of policy.
The FOCUS survey on Monday showed that economists' year-end Selic median forecast rose to 6.50% from 6.25% a week ago. Four weeks ago it stood at 5.50%.
This shows economists now believe the central bank will raise the Selic toward the so-called 'neutral' rate, widely considered to be around 6.00%-6.50%, earlier than previously thought.
Next year's median Selic forecast held steady at 6.50% and the median 2022 inflation forecast also held steady at 3.8%, the survey showed. The median gross domestic product forecast for next year slipped, however, to 2.10% from 2.20%.
The FOCUS survey showed that this year's growth outlook rose for a ninth straight week to 5.00% from 4.9%. A month ago that stood at 3.5%. (Reporting by Jamie McGeever Editing by Steve Orlofsky)