Brasília – Financial institutions polled by the Central Bank are expecting higher inflation, benchmark rates and economic shrinkage this year. According to the Central Bank’s weekly poll of financial market analysts, inflation gauged by the Extended Consumer Price Index (IPCA, in the Portuguese acronym) has climbed for the tenth straight week. This time, the estimate went from 8.79% to 8.97%. The estimate for 2016 remains at 5.50% for five weeks now. This year’s inflation rate is poised to surpass the top end of the target range, which is 6.5%. The midpoint of the range is 4.5%.
In a bid to curb hiking prices, the Central Bank’s Monetary Policy Committee (Copom) is raising the benchmark interest rate, aka Selic. On the 3rd of this month, Copom notched up the Selic rate for the sixth consecutive time to 13.75% per annum.
The forecast of financial analysts for economic shrinkage this year went from 1.35% to 1.45%. It is the fifth consecutive turn for the worse in the estimate for Brazil’s Gross Domestic Product (GDP), i.e. the sum of all goods and services produced in the country. The growth forecast for next year went from 0.9% to 0.7%.
*Translated by Gabriel Pomerancblum
Comments