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Financial market projects less inflation and more growth for 2017 and 2018

Focus Bulletin

Economists heard by the Central Bank raised the projection of economic growth in the face of falling inflation and basic interest rates

Economists of financial institutions continue to chart a positive scenario for the Brazilian economy amid the resumption of economic activity. Data from the Focus Bulletin released on Monday (11) show that experts expect stronger economic growth in 2017 and 2018 in a scenario of falling inflation and interest rates. 

According to the document prepared by the Central Bank with estimates of around 100 analysts, the projection for the Gross Domestic Product (GDP) this year rose from 0.50% to 0.60%. In 2018, the estimate for economic growth rose from 2% to 2.10%.

The increase in projection for GDP occurs after the economy advances in the second quarter of the year. In the period, the economy grew 0.2%, higher than expected in the face of a surprising increase in household consumption. 

With this scenario, economists reduced the estimate for the Broad Consumer Price Index (IPCA), which measures official inflation, from 3.38% to 3.14% this year. In 2018, the projection for the indicator fell from 4.18% to 4.15%.

In relation to the basic interest rate, the Selic, the bet of analysts is that it closes the year at 7%, compared to an earlier forecast of 7.25%. For 2018, the estimate fell from 7.50% to 7.25%. At the last meeting of the Monetary Policy Committee (Copom) of the Central Bank, the rate dropped from 9.25% a year to 8.25%, the lowest level since 2013.

Source: Portal Brasil, with information from  the Central Bank