O Newsletter Highlights, released on Monday (14), increasing worsening expectations for Gross Domestic Product (START) This year. According to the Central Bank (BC), market experts expect GDP in 2020 to be -4.41%. Last week the forecast was -4.40% and for the past four weeks, market experts had predicted a -4.66% drop.
Remember, due to the impact of the new pandemic Coronavirus (Covid-19), in June, experts predicted a 6.28% decline in the Brazilian economy, something unprecedented in history.
In the second quarter of this year, the economy fell 9.7 percent, according to the Brazilian Institute of Geography and Statistics (IBGE). In the third quarter, Brazil’s GDP increased by 7.7%. For the next year, BC’s forecast is 3.50% growth. For over five consecutive months, this estimate has grown by 3.31%.
Suno One: Access free e-books, short courses, articles and Video Investment classes with just one subscription. Tap to learn more!
Focus Bulletin raised its inflation forecast for the 18th week
The Focus Bulletin, in its report released on Monday, raised this year’s inflation to 18th week, as measured by the General Consumer Price Index (IPCA), to 4.35 percent.
Four weeks ago, analysts’ predictions heard central bank with a 3.25% price increase, while last week it was estimated at 4.21%. News Focus This Monday also marks the 22nd consecutive week of increasing the forecast for the Common Market Price Index (IGP-M), for 24.10%.
In the event of confirmed estimates, this year’s inflation will be below the target set by the National Monetary Council (CMN). The target identified by the monetary authority is a 4% inflation rate, with a tolerance of 1.5 percentage points, from 2.5% to 5.5%. However, this goal went significantly further throughout the year.
According to the Minutes of the Final Meeting of the Monetary Policy Committee (Copom), some measure of underlying inflation at levels that are compatible with the achievement of the inflation target within the relevant scope of monetary policy.
For 2021, the country’s monetary authority has set a target of 3.75%, with a difference between 5.25% and 2.25%. O BC estimated price increase of 3.34% by 2021.
Relating to the basic interest rate of the economy (Selic), market experts expect 2% will remain until the end of this year, the lowest level in history. However, next year, the Selic is expected to grow to 2.75%, after consecutive weeks with an estimated 2.50%.
Detailed examination of the most important forecasts for 2020 and 2021:
- START: the forecast for the economy decreased by 4.41%;
- HICP: is projected to increase to 4.35%, with a focus target of 4%;
- Selection rate: The forecast is 2%;
- Dollar: forecast increases to R $ 5.20;
- Balance of trade: expected surplus from 58.00 billion USD to 57.63 billion USD;
- Foreign Direct Investment: Economists pointed out that it would be $ 41.30 billion;
- Main deficit: The forecast is -11.50%;
- Nominal results: The deficit expectation is -15.20%.
- START: economic growth is projected at 3.50%;
- HICP: forecast to increase by 3.34%;
- Selection rate: estimated at 3.00%;
- Dollar: Experts maintain their forecast for R $ 5.03;
- Balance of trade: surplus expectation to increase to 56.50 billion USD;
- Foreign Direct Investment: the forecast is R $ 60 billion;
- Main deficit: The forecast is -2.90%;
- Nominal results: Deficit expectation drops to -7.00%.
O Newsletter Highlights Prepared weekly by the Central Bank. Experts’ predictions from 100 main institutions involved in financial markets in Brazil are used.