UPDATE 1-Brazil cenbank ups 2021 GDP growth forecast to 4.6%

(Adds details, quotes from the Inflation Report)

By Jamie McGeever

BRASILIA, June 24 (Reuters) - Brazil's central bank on Thursday raised its economic growth outlook for this year to 4.6% from 3.6%, closer to the broader market consensus, although it said uncertainty surrounding the pace of growth was considerable.

In its latest Quarterly Inflation Report, the central bank said stronger-than-expected data, measures to preserve jobs, hopes for progress in COVID-19 vaccinations, high commodity prices and the delayed effects of monetary stimulus all suggest a favourable outlook for the economy.

"In this context, we expect something close to stability in the second quarter and growth throughout the second half of the year," the central bank said, noting a "significant reduction in risks to the economic recovery".

The 4.6% gross domestic product growth forecast for this year is closer to the market consensus of 5.0% in the central bank's latest weekly 'FOCUS' survey of around 100 economists.

Breaking down the components of these new projections, the central bank raised its services sector growth forecast to 3.8% from 2.8%, agriculture to 2.5% from 2.0%, and industry to 6.6% from 6.4% in its last Inflation Report in March.

The services sector accounts for around 70% of all economic activity in Brazil.

The central bank raised its outlook for household consumption growth this year to 4.0% from 3.5%, and for fixed business investment growth to 8.1% from 5.1%. It cut its outlook for government consumption growth to 0.4% from 1.2%.

The central bank repeated its view that a continuation of the government's reform agenda to deregulate the economy and get the public finances on a more stable footing was also essential to the recovery and sustainable growth.

But it said uncertainty was considerable, due to new coronavirus variants, difficulty in obtaining vaccine ingredients, high costs in some production chains, and the potential affects of drought in the south of the country on electricity generation. (Reporting by Jamie McGeever; Editing by Alex Richardson and Barbara Lewis)