(Bloomberg) -- Brazil analysts cut their 2023 inflation forecast for the second straight week while reaffirming bets for a slow monetary easing cycle after central bank chief Roberto Campos Neto pointed to an “improving” outlook.  

Annual inflation will end the year at 5.71%, down from a prior estimate of 5.80%, according to a weekly central bank survey of economists published Monday. Still, analysts made no changes to their bets that the benchmark Selic rate will fall to 12.50% by December and then 10% at the end of 2024.

Brazil central bankers are have held borrowing costs at 13.75% since September despite criticism from President Luiz Inacio Lula da Silva. They were among the first to lift rates after the pandemic, delivering an aggressive tightening cycle lasting 18 months. Annual inflation eased for the 12th straight time in mid-May, to 4.07%, and is now back in their tolerance range. 

Read More: Brazilian Households Default Grow Amid High Interest Rates

Traders are boosting bets for an easing cycle beginning in August, after Campos Neto said there are “positive signs ahead” on the inflation outlook. Global activity is cooling off, and commodity and energy costs are falling, he said, adding that core price measures stripping out energy and food prices “came in better” than expected. 

Read More: Brazil Central Bank Sees Inflation Improving, Fans Rate Cut Bets

In coming days, the Senate is expected to vote a closely-watched bill shoring up public finances that members of Lula’s Workers’ Party hope will also help lower rates. On top of that, Brazilian oil giant Petrobras announced earlier this month a series of price cuts to diesel, cooking gas and gasoline amid a new policy that will mix domestic and international costs. 

The monetary authority targets inflation at 3.25% this year and 3% through 2025. Most analysts see consumer price increases at 4.13% in 2024 and 4% in 2025. 

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