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Brazilian banks revise up inflation forecast

Staff writer ▼ | February 16, 2016
The inflation forecast from financial institutions for this year has changed up for the seventh straight time.
Brazilian bank
Brazil   The Extended Consumer Price Index is 7.61% now
The Extended Consumer Price Index (IPCA) forecast climbed from 7.56% to 7.61%. The estimate for 2017 remains at 6%, according to the Focus Bulletin, a poll of financial institutions regarding the main economic indicators conducted weekly by the Brazilian Central Bank.

Despite the high inflation, financial institutions do not believe the Central Bank will raise the Selic benchmark interest rate amid a year of slumping economy. For two weeks now, the forecast for the end of 2016 has remained at 14.25% per annum.

Banks are expecting the Gross Domestic Product (GDP) to shrink 3.33% this year, the fourth consecutive downward revision.

The previous estimate had been 3.21%. In 2017, the poll’s respondents believe the economy should bounce bank, but by a lessening rate. In the fourth straight revision, the growth estimate for next year edged down from 0.60% to 0.59%.

The dollar price forecast for the end of 2016 changed from BRL 4.35 to BRL 4.38, and was kept at BRL 4.40 for the end of 2017.