Brasília – Expectations for the trade balance surplus (exports minus imports) remain on the rise. For the fifth time running, finance sector analysts expect growth in the trade balance, as shown in the Focus Bulletin disclosed on Monday (11) by the Central Bank of Brazil. Projections last week, which were at US$ 16.1 billion, rose to US$ 17.01 billion.
This is favourable to the Brazilian current account balance, which is negative for the country. Four weeks ago, the Focus bulletin forecasted a deficit of US$ 65 billion this year. The figure has been dropping for seven weeks, with the improvement of trade balance expectations, and the deficit estimate is now US$ 62.2 billion, but it should rise to US$ 68.9 billion in 2012.
The BC research also shows the better relations between the public sector’s net debt and the Gross Domestic Product (GDP). The average estimate of financial sector analysts dropped from 39.50% to 39.40% late this year, and should drop to 38% in 2012. The lower the ratio, the better the country’s financial health.
The Focus bulletin did not change expectations for GDP growth for this year, estimated at 4%, but the forecast for 2010 dropped from 4.30% to 4.24%. The figures in the research, however, show that there may be slight reduction in the growth of industrial production, reduced from an estimated 4.08% to 4.05%, though slightly increased from 4.65% to 4.68% in 2012.
The estimated Foreign Direct Investment (FDI) in the country this year was increased from US$ 44 billion to US$ 45 billion. For 2012 the expansion in FDI estimates was from US$ 43.85 billion to US$ 44.85 billion. In counterpart, the exchange rate between the Brazilian real and the US dollar is expected to drop. From 1.70 reals per dollar to 1.68 reals per dollar late this year, and from 1.75 reals to 1.72 reals per dollar late next year.
The forecasts also expect another increase in the benchmark interest rate (Selic), which is currently at 11.75% a year and should rise to 12.25% in the Monetary Policy Committee (Copom) meeting to take place next week, according to the Focus bulletin. According to finance sector analysts, interest rates should maintain at this level, possibly reducing to 11.50% over 2012.
*Translated by Mark Ament
