Markets worsen growth and inflation forecasts once again

Brazil will release its official GDP figures for Q2 2021 on Wednesday, but market analysts have already tempered their expectations for growth this year. The Central Bank’s latest Focus Report — gathering forecasts from financial agents around Brazil — showed GDP growth projections drop to 5.22 percent for 2021. This marks the third consecutive week of decreased expectations, down from 5.27 percent last week.

Meanwhile, analysts increased inflation forecasts for the 21st week in a row, rising to 7.27 percent. If this is indeed the case, the consumer price index would have risen far above the 5.25-percent upper limit of the government’s 2021 target.

Elsewhere, agents left the Brazilian Real slightly weaker in 2021-end forex projections, suggesting Brazil’s currency will hit BRL 5.15 against the dollar by the end of December.

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