BRASILIA, May 30 (Reuters) - Brazil's economic growth surged in the first quarter despite climbing interest rates as fixed investments, household demand and strong farm output underpinned activity, spurring full-year growth forecasts and speculation about another rate hike.

Gross domestic product in Latin America's largest economy rose 1.4% in the January-to-March period from the previous quarter, government statistics agency IBGE said on Friday, in line with the forecast in a Reuters poll of economists.

That marked a sharp acceleration from a weaker than expected end to 2024. IBGE revised fourth-quarter growth down to 0.1% from a previously reported 0.2%.

XP economist Rodolfo Margato said that beyond the expected boost from agriculture, data showed resilient domestic demand, supported by favorable trends in employment, income and credit. As a result, he said he expected to raise his 2025 GDP growth forecast from 2.3%.

"We expect a new wave of upward revisions from the market. In our case, we were already more optimistic, but our view may now move closer to 2.5%," said Margato.

William Jackson, chief emerging markets economist at Capital Economics, said Brazil's economy was on track to grow about 2.3% this year, up from his previous forecast of 1.8%. He said the robust growth could delay the end of interest rate increases by the central bank's rate-setting committee, known as Copom.

Soybean Harvest

Driving growth on the supply side, agriculture stood out with a 12.2% gain from the previous quarter, fueled by a bumper harvest of soybeans, Brazil's top farm export.

Services, which make up roughly 70% of Brazil's economy, expanded 0.3% amid a tight labor market, while industrial output slipped 0.1%.

Reporting by Marcela Ayres Editing by Brad Haynes and Mark Potter