Brazil analysts forecast slower inflation and deeper recession

David Biller – Bloomberg, 03/28/2016

Brazil analysts trimmed their 2016 inflation forecast after price increases slowed more than all analysts expected in March and the economy showed signs of a deeper contraction.

Economists lowered their 2016 inflation forecast to 7.31 percent, from 7.43 percent previously, according to the weekly Focus survey conducted March 24. They also pared their 2016 economic outlook to a recession of 3.66 percent, and lowered their 2017 growth forecast to 0.35 percent from 0.44 percent the prior week.

Brazil’s inflation in the 12 months through mid-March fell more than all economists forecast, making its return to single digits for the first time since October. The currency this month also gained most among 16 major currencies as the market gauged a greater probability President Dilma Rousseff will be impeached. While markets responded positively to the political strife engulfing the capital, it is weighing on the outlook for economic rebound.

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