Yara Aquino
Reporter - Agência Brasil

Brasília - There has been a small change in the market mood regarding future inflation. For the first time in a number of weeks, the market forecast for inflation fell in the latest Focus market survey by the Central Bank which polls some 100 market analysts and financial institutions.

Last week the market forecast for the final increase in the Broad Consumer Price Index (IPCA) for 2006 was 4.61%. This week it was 4.60%. The government target for 2006 is for an IPCA increase of 4.50%.

This week's Focus survey found that the market now expects the country's benchmark interest rate, the Selic, to be 15% annually at the end of the year.

Focus also found that the market believes government-controlled prices (mostly utilities, gasoline and health plans) will rise 4.5% in 2006.

As for GDP growth, for the 39th consecutive week the market said it would be 3.5% in 2006.

Translation: Allen Bennett