(Bloomberg) -- Brazil analysts raised their economic growth estimates for this year and next after a report last week showed household consumption and public spending boosted activity beyond all estimates in the third quarter. 

Latin America’s largest economy will grow 2.92% this year, up from the prior estimate of 2.84%, according to a weekly central bank survey published on Monday. The rate of expansion is seen at 1.51% in 2024. 

Brazil’s economy expanded 0.1% during the third quarter, surprising analysts who expected a contraction amid headwinds including double-digit borrowing costs. Central bankers led by Roberto Campos Neto are seen delivering their fourth straight interest rate cut on Wednesday, lowering the Selic to 11.75%. Board members see room to relax monetary policy as annual inflation is likely to end 2023 within the tolerance range for the first time in three years. 

Read More: Brazil’s Economy Shows Resilience With Unexpected Growth

Household consumption rose in the July-September period aided by higher government spending and a resilient labor market, the national statistics agency reported on Dec. 5. Still, activity is losing steam, adding to bets for more rate cuts ahead. Most analysts see borrowing costs at 9.25% next year. 

Read More:  Brazil Central Bank Can Keep Cutting Rates, Campos Neto Says

Annual inflation is seen at 4.51% in December and 3.93% next year, the survey showed. Starting in 2024, central bankers will target inflation at 3%, with a tolerance band of plus or minus 1.5 percentage points. 

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