Brasília – Financial institutions have once again revised their economic shrinkage forecast for this year. This time, the estimated contraction of Gross Domestic Product (GDP), the sum of all goods and services produced in the country, has gone from 2.44% to 2.55%. The outlook for 2016 has also been changed from 0.5% to 0.6%, in the sixth straight turn for the worse week-on-week.
The forecasts are from the Focus Bulletin, a weekly poll of financial institutions conducted by the Brazilian Central Bank on the main economic indicators. Respondents believe industrial output should drop 6.2%, this year. Last week, the rate had been 6%. In 2016, industry is expected to rebound, but the rate is dwindling: it has edged down from 0.72% to 0.5%, in the third consecutive downward revision.
The benchmark interest rate (known as Selic) should be 14.25% per annum this year and then decrease in 2016. The median forecast (which disregards the lowest and highest numbers) for the end of 2016 remains at 12% per annum. The US dollar price forecast for the end of this year has been revised from R$ 3.60 to R$ 3.70. The projection for the end of 2016 went from R$ 3.70 to R$ 3.80.
*Translated by Gabriel Pomerancblum
