Brasília – Financial institutions surveyed by the Brazilian Central Bank (BC) estimate that the Selic, the benchmark interest rate, will go up 0.5 percentage points in July. The next meeting of the Monetary Policy Committee (Copom), which establishes the interest rate, is set to happen on Tuesday (28th) and Wednesday (29th). Currently, the Selic stands at 13.75% per year, after going through six straight raises.
After this month’s meeting, the financial institutions believe there won’t be any more raises. With this, the interest rate should close the year at 14.25%. Although it helps in controlling prices, the rise in interest rates hurts the economy, which is going through a downturn year, with declines in both consumption and output.
The financial institutions’ estimation for the economy retraction this year worsened, going from 1.70% to 1.76%. For the next year, the projection points to a growth of the Gross Domestic Product (GDP), but of only 0.20% against the 0.33% number estimated last week. In the financial market’s assessment, industrial output should decline 5% this year. In 2016, the growth estimation went from 1.50% to 1.30%. The estimation for the price of the dollar went up from R$ 3.23 to R$ 3.25 for the end of 2015, and remains at R$ 3.40 at the end of 2016.
*Translated by Sérgio Kakitani
