SAO PAULO, Brazil (AP):

Economists and analysts surveyed by Brazil's central bank have reduced their forecasts for Brazil's year-end interest rate, expressing confidence that inflation will be kept under control.

According to the survey published Monday, Brazil's reference Selic rate is expected to be 11.5 per cent at year's end, below the 11.75 per cent forecast in last week's survey. The Selic rate currently stands at 13 per cent.

Analysts also reduced their estimates slightly for 2007 year-end inflation as measured by the official consumer price index, or IPCA, to 4.07 per cent from 4.09 per cent. That's below the central bank's inflation target of 4.5 per cent for the year.

Lower inflation and borrowing costs could lead to renewed investment and more domestic consumption, since a large part of durable good purchases are financed and paid in instalments.

Weekly central bank survey

The weekly central bank survey tracks the opinions of 100 analysts and economists from banks and brokerages and reports the average of their expectations.

The analysts maintained their 2006 gross domestic product growth estimate at 2.73 per cent and at 3.5 per cent for 2007.

In the third quarter of 2006, Brazil's GDP grew 3.2 per cent from the year-earlier period and 0.5 per cent when compared with the second quarter, according to Brazilian Census Bureau, or IBGE.