Brazil Economists Slash Inflation Forecast to 4.05 Percent

Brazilian economists cut their 12-month inflation forecast for a sixth week as a stronger currency drove down the cost of imported goods and the economy slowed.

Consumer prices probably will rise 4.05 percent over the next 12 months, according to the median estimate of about 100 economists at financial institutions in a weekly central bank survey taken this month. The median estimate fell from 4.08 percent a week ago.

Annual inflation, as measured by the government’s IPCA consumer price index, slowed for an eighth month in September, to 3.7 percent from 3.84 percent in August. A 9.2 percent gain in the real so far this year, the best performance of the 16 most-traded currencies, is helping to slow inflation.

Seven of eight economists surveyed predicted a half-point cut to 13.75 percent at the central bank policy meeting last week, while one economist predicted a quarter-point cut.

Latin America’s largest economy will probably expand 3 percent in 2006, according to the economists, who cut their median estimate from 3.01 percent.

The Brazilian currency may end the year stronger than previously forecast. The economists changed their year-end estimate for the real to 2.18 per dollar from 2.19 per dollar, according to the survey.