Brazil economists cut their growth forecasts below 3 percent this year and next for the first time, as inflation curbs purchasing power and confidence in the world’s second-largest emerging market.

Brazil’s economy will expand 2.34 percent this year and 2.80 percent in 2014, compared with the previous week’s forecasts of 2.40 percent and 3 percent, respectively, according to a July 5 central bank survey of about 100 analysts published today. It was the third straight week analysts cut growth expectations for both years.

President Dilma Rousseff’s administration has pledged to improve government services while maintaining fiscal austerity and control of inflation, after more than a million protesters took to the streets last month to oppose corruption and high prices. Support for Rousseff’s government plunged by almost half last month, according to Datafolha. The central bank this week will increase the benchmark interest rate by 50 basis points to 8.50 percent, according to 30 economists surveyed by Bloomberg.

Swap rates on the contract due in January 2015 fell five basis points, or 0.05 percentage point, to 9.62 percent at 9:01 local time. The real was little changed at 2.2515 per U.S. dollar.

Faster Inflation

Consumer prices rose 6.70 percent in June from last year, the fastest pace since October 2011, the national statistics agency said on Friday. Central bankers, in their quarterly inflation report released last month, said inflation will reach 6 percent this year should the benchmark rate remain unchanged at 8 percent, up from a March forecast of 5.7 percent. Policy makers target inflation at 4.5 percent plus or minus two percentage points.

Rousseff’s approval rating fell to 30 percent, down from 57 percent before protests began in early June and a high of 65 percent in March, according to a survey by Datafolha published on June 29.

Gross domestic product expanded 0.55 percent in the first quarter, less than the 0.9 percent median forecast in a Bloomberg survey.

Brazil’s gross domestic product last year expanded by 0.9 percent, the slowest pace since the economy contracted in 2009.