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Financial market economists lowered their inflation expectations for this year and 2019. They also began to see lower economic growth over the next year.
Forecasts appear in the market report, also called "Focus" report published Monday (24) by the Central Bank (BC). The report is the result of a survey conducted last week with more than 100 financial institutions.
With regard to the general index of consumer prices (IPCA), the country's official inflation, the financial market has lowered the forecast from 3.71% to 3.69% for this year.
Market expectations are below the inflation target of 4.5% this year and are within the tolerance range set by the system. The goal will be achieved if the IPCA stands between 3% and 6% in 2018.
The inflation target is set by the National Monetary Council (NMC). To do this, the Central Bank increases or reduces the basic interest rate of the economy (Selic).
In 2019, economists at financial institutions lowered their inflation forecasts from 4.07% to 4.03%. The main target of the following year is 4.25% and the target system's tolerance range is from 2.75% to 5.75%.
For the growth of this year's gross domestic product (GDP), financial market forecasts remained at 1.30% last week.
GDP is the sum of all goods and services produced in the country and is used to measure the evolution of the economy.
For the coming year, financial market expectations for the expansion of the economy rose from 2.55% to 2.53%.
Bank economists have also not changed forecasts of economic expansion for the 2020 horizon and the 2021 horizon – which has remained at 2, 5%.
- Interest Rates – The market fell from 7.50% to 7.25% per annum, its predictions regarding Selic's interest rate at the end of the year. next year. Currently, the economy's core interest rate is 6.50% per annum, at its all time low. Thus, badysts continue to predict interest rates next year.
- Dollar – The financial market projection for the exchange rate at the end of 2018 rose from $ 3.83 to $ 3.85 dollars.
- Balance of trade – For the trade balance (result of total exports minus imports), the projection in 2018 rose from 58 billion to 57.75 billion. For the coming year, market experts estimate that the surplus has gone from $ 52.8 billion to $ 53.4 billion.
- Foreign Investment – The report's forecast for the inflow of foreign investment in 2018 has risen from $ 72 billion to $ 74 billion. In 2019, badysts' estimates rose from $ 80 billion to $ 78.4 billion.
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