Economic expectations have deteriorated in the past week, according to the Focus Report, a weekly Central Bank survey of top-rated investment firms. Expectations have now fallen for three consecutive weeks, reversing the bullish trend seen at the beginning of the year.
Financial institutions forecast GDP growth at just 3.29 percent in 2021, which would not be enough to reverse pandemic-led losses suffered in 2020. Per the Central Bank’s economic activity index, Brazil’s GDP shrank by 4 percent last year; official figures will be released on March 3.
Despite the anemic growth, inflation is expected to pick up. Markets expect a 3.85-percent increase to the consumer price index (IPCA), pushing benchmark interest rates to 4 percent by year-end, against the current 2 percent level.
Correction: A previous version of this post said that GDP growth expectations have fallen for two consecutive weeks, instead of three. That information has been corrected.Support this coverage →