BRASILIA, Nov 18 (Reuters) - Brazilian interest rates are expected to be cut to a new low of 4.25% by the end of next year, according to a central bank survey of economists, which also showed inflation drifting further below the monetary authority’s target.
The central bank has already lowered its benchmark Selic rate to 5.00%, the lowest on record, and has given a clear signal it will reduce it by another 50 basis points to 4.50% next month.
According to the average forecasts of more than 100 economists polled in the weekly ‘FOCUS’ survey, the Selic will be reduced further next year, albeit by a smaller magnitude.
Economists also trimmed their average 2020 inflation forecast to a new low of 3.58%, from 3.60% a week ago, further below the central bank’s official goal of 4.00%.
Extensive monetary stimulus should help boost economic activity, the survey showed, with next year’s average growth forecast picking up to 2.17%, from 2.08% the week before, the second upward revision in a row. (Reporting by Jamie McGeever; Editing by Alex Richardson)