Brazil Fipe shaves '99 inflation forecast to 6 pct
Reuters, Wednesday, May 19, 1999 at 12:19
SAO PAULO, May 19 (Reuters) - The Univerity of Sao Paulo's
Economic Research Institute (Fipe) on Wednesday revised the
forecast for its closely-watched inflation index down to 6
percent from 7 percent for 1999 as food prices fall.
"Food continues to decline and, as a result, the index will
probably show deflation this month," said Fipe consumer price
index coordinator Heron do Carmo.
Fipe's forecast is now more than 10 percentage points below
the official government forecast for inflation of 16.8 percent,
agreed with the International Monetary Fund (IMF) in early
March.
After Brazil's sharp currency devaluation in January, Fipe
forecast inflation as high as 12 percent for 1999 after
deflation of 1.8 percent in 1998.
But the institute has gradually whittled the forecast down
to reflect the Brazilian real's recovery against the dollar, to
a depreciation of less than 30 percent, and the sluggish
economy's weight on price increases.
Do Carmo admitted that the inflation forecast for this year
may be trimmed even further.
Early Wednesday, Fipe reported inflation in the four weeks
to May 15 of just 0.12 percent compared to 0.35 percent in the
previous four-week period.
Copyright 1999, Reuters News Service
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