Brasília – Brazilian financial market players have revised down their inflation and economic growth projections for this year. According to the Focus Bulletin, which contains the results of a poll of financial institutions conducted on a weekly basis by the Brazilian Central Bank, the forecast for the Extended National Consumer Price Index (IPCA) at the end of this year moved from 3.9% to 3.71%, and from 4.4% to 4.37% for 2018.
The revision comes after the announcement that the IPCA reached 0.31% in May, the lowest rate for the month since 2007 (0.28%). In June, the poll’s respondents expect consumer prices to remain flat. The previous projection had been 0.2% inflation.
Gross Domestic Product (GDP) growth estimate slid from 0.5% to 0.41% for this year, and from 2.4% to 2.3% for 2018.
Respondents see the benchmark interest rate (aka Selic) ending 2017 and 2018 at 8.5% per annum, down from the current 10.25% per annum. The US dollar is seen costing BRL 3.39 at the end of this year and BRL 3.40 at the end of 2018.
*Translated by Gabriel Pomerancblum
