By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The latest forecasts by economic analysts and investors show further deterioration in the Brazilian economy this year. According to the latest Focus Bulletin, released by the country’s Central Bank with the forecasts by market analysts from a hundred consultancies, estimates show an increase in annual inflation and a further contraction in the country’s GDP.

Forecasts for this year's inflation increase again, Rio de Janeiro, Brazil News
Forecasts for this year’s inflation increase again, photo courtesy of Archivo Agencia Brasil.

According to the Focus Bulletin, market analysts now predict the annual consumer inflation rate (IPCA) in 2015 to reach 8.26 percent, the highest rate since 2003. The previous report had forecast a rise of 8.25 percent for the IPCA. For the country’s GDP, analysts increased their forecast of a contraction from -1.10 percent to -1.18 percent.

Analysts also predicted that the benchmark interest rate (Selic), that was just increased by 0.5 points to 13.25 last week, will increase by another 0.25 percentage points by the end of the year, reaching 13.50 percent. For 2016, however, these same analysts say that the Selic will decrease to 12.00 percent.

As for the foreign exchange rate, the forecast was maintained at R$3.20/US$ for the end of 2015. The devaluation of the Brazilian real in relation to the US dollar and the increase in interest rates led analysts to believe that the country will become slightly more attractive to foreign investors, and have forecast an increase in foreign investments for the year from US$57 billion to US$57.5 billion, and to US$60 billion in 2016.

The Central Bank’s weekly bulletin also estimated an increase in the current account deficit, from US$78 billion to US$78.5 billion, while the country’s trade balance declined from US$4.17 billion to US$4.02 billion.

4 COMMENTS

  1. It’s awfully hard to believe any figures from the government. 8.26% REALLY? My electric bill just increased 45% and I just saw picanha at over R$50 a kilo.
    When will PT tell the truth? Inflation is closer to 50.26%!

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