Brasília – Financial institutions polled by the Brazilian Central Bank have once again revised their economic shrinkage expectation for this year. This time, the forecast for the Gross Domestic Product (GDP) – the sum of all goods and services produced in the country – went from 3.02% to 3.05%, as reported in the Central Bank’s Focus Bulletin, a poll of financial market players that covers relevant economic indicators.
The GDP shrinkage expectation for 2016 also changed, from 1.43% to 1.51%. The poll’s respondents believe industrial production will drop 7% this year. The projection for next year changed from a 1.5% to a 2% drop.
According to the poll, recession should bring above-target inflation in its wake this year. The midpoint of the target range is 4.5% and the upper limit is 6.5%. Expectation regarding the official consumer price index Índice Nacional de Preços ao Consumidor Amplo (IPCA) was revised from 9.85% to 9.91%. Next year, it is believed that inflation will stay within the tolerance band, but far from the midpoint at 6.29%. Last week’s projection was 6.22%.
*Translated by Gabriel Pomerancblum
