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Fears strong growth in Brazil will fuel inflation in months ahead

Tuesday, October 19th 2010 - 03:56 UTC
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The data follows the weekly Central bank survey among economists The data follows the weekly Central bank survey among economists

Economists in a weekly central bank survey raised for a fifth straight week their forecasts for Brazil's benchmark inflation index in 2010 and 2011, underscoring concerns that growth in the economy will raise consumer prices in the months ahead, the bank said.

Economists forecast the benchmark IPCA inflation index at 5.20% for 2010, compared with the 5.15% rate they had predicted one week ago.

The increase in forecasts came after data last week that showed the index jumped 0.45% in September, up sharply from the 0.04% rate in August but in line with expectations. Analysts expect strong economic activity this year to increase prices for food and other consumer items in the coming months, fuelling inflation.

Growth estimates in 2010 for Brazil's economy, the largest in Latin America, were kept unchanged from the previous week at 7.55%, the central bank said.

For 2011, the IPCA estimates were raised to 4.99% from previous week's 4.98%. The central bank has a 4.5% inflation target for 2010 and 2011, plus or minus 2 percentage points.
 

Categories: Economy, Brazil.

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