Analysts expect Brazil’s economy to contract by 1.8 percent this year, with the inflation rate hitting 9.25 percent, the Central Bank said Monday.

The gross domestic product (GDP) and inflation estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy.

The latest forecast is more pessimistic than the one released last week, when analysts expected the GDP to contract by 1.76 percent and inflation to hit 9.23 percent.

Analysts’ lack of confidence in Brazil’s economy is based on the continuing drop in the value of the real against the dollar and the recent increase in the cost of public services, such as water, electricity and transportation.

The Central Bank will likely keep the benchmark interest rate at 14.25 percent to fight inflation, analysts said.

The government said in July that it would not meet the 1.1 percent primary fiscal surplus target it set for this year and the goal was now to cut public spending by the equivalent of 0.15 percent of GDP.

The government plans to slash the budget by 8.6 billion reais ($2.66 billion), a move that will further slow economic activity and deepen the contraction.

Brazil’s economy grew by just 0.10 percent in 2014. EFE