Brasília – Brazilian financial institutions changed up their inflation forecast for this year for the seventh straight time. The Extended Consumer Price Index (IPCA) forecast climbed from 7.56% to 7.61%. The estimate for 2017 remains at 6%, according to the Focus Bulletin, a poll of financial players covering the main economic indicators that is conducted weekly by the Brazilian Central Bank.
Despite the high inflation, the poll’s respondents do not believe the Central Bank will raise the Selic benchmark interest rate in a year of slumping economy. For two weeks now, the forecast for the end of 2016 has remained at 14.25% per annum.
Banks are expecting the Gross Domestic Product (GDP) to shrink 3.33% this year, the fourth consecutive downward revision. The previous estimate had been 3.21%. In 2017, respondents believe the economy should bounce back, but by a lessening rate. In the fourth straight revision, next year’s growth estimate edged down from 0.60% to 0.59%.
The dollar price forecast for the end of 2016 changed from BRL 4.35 to BRL 4.38, and was kept at BRL 4.40 for the end of 2017.
*Translated by Gabriel Pomerancblum
