Brazil economists increased their 2014 benchmark interest rate forecast for the first time since March as policy makers seek to slow inflation in the world's second-largest emerging market.

The central bank board will raise the Selic rate to 8.5 percent by the end of next year, compared with the previous week's forecast of 8.25 percent, according to a central bank survey of 100 analysts published yesterday. Economists kept unchanged estimates that borrowing costs will climb to 8.25 percent by the end of this year from 7.5 percent yesterday.

Brazilian President Dilma Rousseff is seeking to cool inflation without sacrificing economic growth. Central bankers this week will raise borrowing costs by 25 basis points for the second straight monetary policy meeting to 7.75 percent, according to the median estimate of 37 economists polled by Bloomberg News.

Brazil's US$2.5 trillion economy will grow by 2.93 percent this year, down from the previous estimate of 2.98 percent, according to the survey.