São Paulo – Brazil’s Gross Domestic Product (GDP) should contract by 0.78% this year and inflation should be at 7.93% by the end of 2015, as per financial market forecasts issued this Monday (16th) in the Focus Bulletin, a weekly poll of financial institutions conducted by the Brazilian Central Bank. The report shows that investors and analysts are more pessimistic than last week regarding Brazil’s economy.
Last week, the Focus Bulletin GDP contraction forecast was 0.66% and inflation was expected to be 7.77%. In case the market’s forecast proves true, inflation will close the year above the government’s target range, whose midpoint is 4.5% allowing for two percentage points up or down.
Now, in addition to the indicators above, expectations have also worsened concerning the trade balance and foreign direct investment (FDI). Last week, investors expected exports to exceed imports by US$ 4 billion. Now, the surplus forecast is down to US$ 3 billion. The FDI inflow forecast has dropped from US$ 60 billion to US$ 57.5 billion.
*Translated by Gabriel Pomerancblum
