Brazil private economists forecast two 50-basis-point rate hikes this year

       BRASILIA/SAO PAULO, Sept 30 (Reuters) - Private sector
economists in Brazil now project a more restrictive path for
interest rates, with two 50-basis-point hikes expected this year
and higher borrowing costs next year, a weekly central bank
survey showed on Monday.
    Amid a stronger-than-expected economy, policymakers raised
rates by 25 basis points to 10.75% earlier this month, leaving
the door open for further increases without committing to their
specific size.
    The survey revealed that economists now foresee twice the
tightening at each of the upcoming policy meetings in November
and December, with the benchmark Selic rate ending this year at
11.75%, up from 11.50% in the previous survey.
    For 2025, economists expect a 25 basis-point hike in
January, with the rate kept at 12% through mid-year. They
predict four 25 basis-point cuts from July onward, bringing the
Selic to 10.75% by year-end.
    Previously, the forecast was for the rate to close next year
at 10.50%.
    The revision came alongside unchanged inflation forecasts
for this year and next, breaking a streak of ten consecutive
weeks of rising expectations for 2024 and two weeks for 2025
expectations.
    Economists also lowered their inflation outlook for 2026
after two consecutive weeks of increases.
    Still, inflation projections at 4.37% this year, 3.97% in
2025 and 3.60% in 2026 remain above the official 3% target. The
2027 forecast has been kept steady at 3.5% for over a year.
    Since its latest rate decision, policymakers have emphasized
their concern over inflation expectations unanchoring from the
target, which they see as a critical issue.
    "Prolonged above-target medium-term inflation expectations
(2026-27) could contaminate and harden price-formation
mechanisms and make it more costly for the central bank to
deliver inflation at the target," Goldman Sachs economist
Alberto Ramos said.
    The following is a set of projections from the survey:

 Market estimates          2024     2024     2025      2025
 Median                    Now    Previous    Now    Previous
                                    week               week
 IPCA inflation index      4.37     4.37     3.97      3.97
 (%)
 GDP growth (%)            3.00     3.00     1.92      1.90
 Brazilian real to U.S.    5.40     5.40     5.35      5.35
 dollar (year-end)
 Interest rate Selic      11.75    11.50     10.75     10.50
 (year-end, %)

 (Reporting by Marcela Ayres and Gabriel Araujo; Editing by Jan
Harvey and Angus MacSwan)