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Brazilian government forecast for economy improves

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Staff Writer | August 18, 2016
Brazil growth
LatAm   The inflation forecast is kept at 4.8%

The Brazilian government changed its 2017 growth forecast. GDP is now seen climbing 1.6% next year, up from 1.2% as of the prior forecast.

The inflation forecast under the Extended National Consumer Price Index (IPCA) was kept at 4.8%.

In real terms, industrial output has gone up for four straight months. The Monthly Trade Survey from the Brazilian Institute of Geography and Statistics (IBGE) showed signs of stabilization in retail activity, with a 0.1% increase in June.

The Brazilian government's base scenario is one of GDP growth in Q4 from Q3. For 2016, the Secretariat for Economic Policy revised down its GDP contraction estimate from 3.1% to 3%. The IPCA forecast was kept at 7.2%.

According to the Focus Bulletin, a weekly poll of financial institutions by the Central Bank, Brazil should weather a 3.2% drop in GDP this year, with inflation at 7.31%. In 2017, the poll’s respondents believe GDP should grow 1.1%, with the IPCA inflation rate at 5.14%.

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