Brazil analysts expect 7.29% inflation in 2016
The financial market projection for this year's inflation as measured by the Broad National Consumer Price Index (IPCA) has been revised up for the sixth consecutive week, changing from 7.25% to 7.29%. For 2017, the forecast has been maintained at 5.5% for six consecutive weeks. These projections are in the Focus Market Readout, a weekly survey of financial institution expectations for Brazil's main economic indicators released by the Central Bank on Mondays.
The inflation estimates are above the target of 4.5% set by the government for both years. The upper target range is 6.5% this year and 6% in 2017.
The Central Bank is responsible for ensuring inflation stays within target, using such instruments as the benchmark interest rate (SELIC). Currently, the SELIC rate stands at 14.25% per annum.
The financial institutions' expectation for the SELIC rate at the close of 2016 has been revised from 13% to 13.25% p.a. For the end of 2017, the forecast went down from 11.25% to 11% p.a.
The expected decline in the Gross Domestic Product (GDP) remains at 3.44% this year. For 2017, the GDP growth projection was maintained at 1%.
The forecast for the dollar exchange rate has also remained stable from last week—R$3.60 at the close of this year and R$3.80 at the close of 2017.
Translated by Mayra Borges
Fonte: Brazil analysts expect 7.29% inflation in 2016
