Brasília – The economy shrinkage forecast by Brazilian banks has worsened again, this time from 3.40% to 3.45%. The estimate is part of the Focus Bulletin, a weekly poll of financial institutions conducted by the Brazilian Central Bank. The Gross Domestic Product (GDP) forecast for 2017 has been kept at 0.50%.
The inflation forecast by Brazilian banks has edged down: the Extended Consumer Price Index (IPCA) forecast, based on which the government sets it inflation targets, is down from 7.62% to 7.57% this year.
Amid a shrinking economy, financial institutions are not expecting the benchmark interest rate (known as Selic) to be changed this year. The rate is believed to remain at the current 14.25% through the end of the year.
*Translated by Gabriel Pomerancblum
