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Brazil economists bet the central bank will be slower to raise interest rates next year as Latin America’s largest economy got off to a bad start in January.

Economists cut their forecast for the benchmark Selic rate to 7.75 percent at end-2020, from 8 percent previously, according to a weekly central bank survey. The monetary tightening is now expected to begin in March of next year rather than in January, and 2019 growth estimates were downgraded for a third consecutive week, to 2.01 percent.

In a separate report, the central bank said economic activity shrank 0.41 percent in January, worse than the 0.2 percent decline forecast by analysts. The bank’s economic activity index is considered a proxy for gross domestic product.

A string of disappointing economic data has raised concern about Brazil’s economic recovery following two years of lackluster growth. Some investors even speculate the central bank may signal room for additional monetary easing when it concludes its rate-setting meeting on Wednesday, under new chief Roberto Campos Neto. Uncertainty about the approval of a crucial overhaul of the pension system still hold back bets on additional monetary tightening, however. The Selic is widely forecast to remain at 6.5 percent this time.

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