São Paulo – The Brazilian Central Bank revised down its economy growth forecast for this year. According to the organization, the Brazilian Gross Domestic Product (GDP) should grow by 1.6%. The information is part of the Quarterly Inflation Report, which also forecasts price increase to be 6.4% by the end of the year, percentage close to the top end of the inflation target of 6.5%.
The previous edition of the Quarterly Inflation Report, referring to Q1, forecasted a growth of 2% this year and inflation rate at 6.1%. The same document of the Central Bank reduced from 3.5% to 2.8% agriculture growth and started to show a decline for industrial output: in the Q1 document, the financial authority saw a growth of 1.5% in industrial activity in 2014. Now, the forecast shows a decline of 0.4%.
According to information from the Central Bank, the lower estimate in relation to agricultural output was driven by the drought which hit the country in the first months of the year and has affected production. As regards the industry, the new forecast is result of the revisions of performance forecast of transformation industry and civil construction sectors. The service sector should grow by 2% in the new forecast. Previously, the Central Bank saw a growth of 2.2%.
*Translated by Rodrigo Mendonça
