Brasília – The Brazilian government has revised its growth projection for the Gross Domestic Product (GDP) this year downwards from 5% to 4.5% and raised the inflation estimate based on the Broad Consumer Price Index (IPCA, in the Portuguese acronym) from 5% to 5.7%. The new projections were culled from the second bimonthly government assessment report on revenues and spending, disclosed by the Ministry of Planning.
The report shows that the government raised the General Price Index – Domestic Availability (IGP-DI) from 6.28% to 7.01%.The IGP-DI is the reference for readjusting rents and state-controlled prices such as electric power and telephony.
The fiscal reinforcement disclosed in the assessments of February and March has been maintained at 50.1 billion reals (US$ 30.9 billion) in relation to the total spending volume approved by the National Congress for 2011.
The government technicians have also lowered the average exchange rate estimate from 1.70 to 1.61 real (US$ 1.05 to US$ 1.00). The projection of growth in the total wages paid has gone from 10.96% to 11.71%. The minimum wage used in the calculation is the current one, of 545 reals (US$ 337).
The ministry also considered a higher oil price. The average oil barrel price estimate has gone from US$ 98.34 to US$ 103.31.
The average benchmark interest rate (Selic) projection has gone from 11.58% a year to 11.74%.
*Translated by Gabriel Pomerancblum
