Brasília – The projection by financial institutions for growth of the Brazilian economy this year has been slightly reduced. According to a research by the Central Bank of Brazil (BC) with the financial market, the estimate for expansion of Gross Domestic Product (GDP), the added value of goods and services produced in the country, dropped from 2.21% to 2.20% this year. For 2014, there has also been a reduction in the forecast, from 2.5% to 2.4%.
The estimate for expansion of industrial production rose from 2.08% to 2.11% this year, and dropped from 3% to 2.90% in 2014.
The projection of financial institutions for relations between public sector net debt and GDP was increased from 34.9% to 35%, this year, and maintained at 34.7% next year.
The Focus research also shows that financial institutions hope for growth of 0.5 percentage point in the benchmark interest rate, the Selic, which is currently at 8.5% a year. On Tuesday and Wednesday (28), the Central Bank of Brazil’s Monetary Policy Committee (Copom) should meet to define the benchmark interest rate (Selic).
According to the BC research, the Selic should end 2013 at 9.5% a year. The previous forecast was 9.25% a year. Apart from the meeting this month, the Copom should also define the Selic in October and November this year. For 2014, the forecast remains at 9.5% a year.
The estimate of financial institutions for the Broad Consumer Price Index (IPCA) rose from 5.74% to 5.80% in 2013, and from 5.80% to 5.84% next year. This forecast is above the centre of the inflation target (4.5%) to be followed by the Central Bank, but below the upper limit for the target (6.5%).
As regards exchange rates, the expectation for dollar to real exchange rates at the end of the year climbed from one dollar being sold for R$ 2.30 to R$ 2.32. For late 2014, the estimate has also risen, from R$ 2.35 to R$ 2.38.
*Translated by Mark Ament
