Market forecast for 2016 GDP decline revised slightly from 3.27% to 3.24%

Financial institutions heard by Brazil's Central Bank (BC) have slightly revised their expectation for the country's economic shrinkage in 2016, from -3.27% to -3.24%. These figures are part of a weekly Central Bank survey of the financial market on key economic indicators.

The expected inflation as measured by the Broad National Consumer Price Index (IPCA) has been maintained at 7.21% in 2016, whereas the forecast for 2017 dropped from 5.29% to 5.20%. These projections are still far from the 4.5% inflation target.

The forecast for Brazil' benchmark interest rate, the SELIC, has risen from 13.25% to 13.50% per annum at the end of 2016. The expected rate for the close of 2017 has stood at 11% p.a. for five consecutive weeks.

The projection for the end-of-year US dollar exchange rate was slightly revised from R$3.34 to R$3.30 in 2016, and maintained at R$3.50 in 2017.

Translated by Mayra Borges