GDP estimates cut down by 0.1 point in a month

debt gdp numbers brazil central bank
Economy Minister Paulo Guedes still talks of a V-shaped recovery, despite tiny numbers. Photo: Foto: Wilson Dias/ABd

Brazilian market analysts continue to reduce their forecasts for the country’s GDP, according to this week’s Focus Report, published by the Central Bank. Projections for this year’s GDP growth fell from 4.94 percent to 4.93 percent, the fourth consecutive decrease. Just one month ago, analysts had tipped growth of over 5 percent.

Estimations also fell for next year, dropping from 1.2 percent to just 1 percent.

Inflation projections followed the same trend, with the survey showing higher forecasts for consumer price index IPCA for this year and the next. Analysts now expect the inflation rate to end 2021 at 9.33 percent, miles beyond the Central Bank’s 3.75 percent target. 

For next year, the inflation spiral is set to continue, with year-end estimates rising from 4.55 to 4.63 percent.

Regarding benchmark interest rates, market analysts expect the Selic rate to finish 2021 at 9.25 percent, reaching 11 percent by the end of next year.