Brazil's Central Bank Monetary Policy Committee (Copom) Thursday is due to release its quarterly inflation report, with forecasts for inflation and growth and models of how the market expectation for rate cuts would change these forecasts.

In its March inflation report, the Central Bank forecast 4.4% inflation and 3.5% growth this year and 5.2% inflation in 2013 with the Selic overnight rate at 9.75%. The report only gives a GDP forecast for the current year.

Even though 5.2% inflation forecast is above the 4.5% target for 2013, the Copom has cut the Selic to 8.5%, and the current market consensus is that the Selic will fall to 7.5%.

The market has long been more pessimistic than the Copom on the inflation outlook, and the market consensus expects 5.0% inflation and 2.3% growth this year, and 5.6% inflation in 2013.

Central Bank President Alexandre Tombini has said he expects growth to pick up later in the year, though in a speech last week he seemed to indicate this acceleration will only begin in the fourth quarter, rather than in the third, as he had previously said.

The National Monetary Council (CMN), formed by the Finance and Planning ministers, and Central Bank president, holds its monthly
meeting Thursday. The CMN is expected to confirm the 2013 inflation target at 4.5%, with a two-point margin, and to set the same target and
margin for 2014.

Two reports will be released Friday: the primary balance from the Central Bank, and May producer prices from state statistics agency IBGE.