Brasília – Financial market analysts polled by the Central Bank are expecting the rate of growth of the Brazilian economy to decline, according to the Focus bulletin issued this Monday (28th). The 2012 Gross Domestic Product (GDP) growth forecast dropped from 3.09% a week ago to 2.99% this week. The forecast for next year was maintained at 4.5%.
As a result, analysts are expecting a lowering of the benchmark interest rate (aka Selic rate) to stimulate the economy. A 0.5 percentage point cut is expected at the meeting of the Central Bank’s Monetary Policy Committee (Copom, in the Portuguese acronym), due next Tuesday and Wednesday (30th). The current benchmark rate is 9%.
After the cut, analysts are expecting at least one more 0.5 percentage point cut. Should that prove true, then the Selic rate will be 8% this year. The Copom has already lowered the rate by 2 percentage points in 2012. The forecast for the end of 2013 is 9.5%, according to the Focus bulletin.
According to the bulletin, the inflation expectancy measured as per the Broad Consumer Price Index (IPCA) is 5.17%, as against 5.21% in the preceding Focus bulletin. The 2013 IPCA projection remains at 5.6%.
*Translated by Gabriel Pomerancblum
