Brasilia, Dec 27 (IANS): Brazil's financial market cut the inflation forecast for 2022 from 5.76 per cent to 5.64 per cent, the Central Bank of Brazil.

According to the bank's weekly focus survey of the country's top financial institutions, analysts raised the inflation forecast for 2023 from 5.17 per cent to 5.23 per cent, reports Xinhua news agency.

The country's official inflation target is 3.5 per cent for this year and 3.25 per cent for next year, with a margin of error of 1.5 percentage points in both cases.

The market expects the benchmark interest rate, currently at 13.75 per cent annually, to gradually decline to 11.75 per cent in 2023.

Economists slightly downgraded their forecast expansion in GDP for 2022 from 3.05 per cent to 3.04 per cent, but maintained their projection for 2023 at 0.79 per cent.

In terms of the exchange rate, the market expects Brazil's currency, the real, to trade at 5.25 to the US dollar at the end of the year and at 5.27 reals to the US dollar at the end of 2023.

Analysts also estimated a trade surplus of $56.95 billion for 2022 and $58.8 billion for 2023.

Meanwhile, Brazil's foreign direct investment is expected to reach $81.6 billion in 2022 and $80 billion in 2023.