B&E | Financial Market expects Brazilian Inflation to close out 2016 within Target

B&E | Financial Market expects Brazilian Inflation to close out 2016 within Target

By Kelly Oliveira
Agência Brasil

Image Attribute:  Banco Central do Brasil headquarters / Creative Commons

Image Attribute:  Banco Central do Brasil headquarters / Creative Commons

For 2017, the forecast for the Broad National Consumer Price Index (IPCA) reached 4.90%. The inflation target for next year stands at 4.5%, with a ceiling of 6%; it is the sixth consecutive drop for the estimate, reported the Central Bank.

The financial market's forecast for inflation is currently within this year's target. The IPCA projection fell from 6.52% to 6.49%. The information is from the Focus Bulletin, released by the Central Bank with the projections from financial institutions.

With the economic recession and the improvement in inflation, the Central Bank has suggested it may cut the benchmark interest rate (SELIC) further. At its last two meetings, the bank's Monetary Policy Committee (COPOM) reduced the SELIC by 0.25 percentage points. Currently, the rate stands at 13.75% per annum.

According to the Focus Bulletin, the SELIC rate could close out 2017 at 10.50% per annum. The projection for this year's GDP remains at 3.48%. For 2017, the growth forecast was lowered for the ninth straight time, going from 0.70% to 0.58%.


Translated by Amarílis Anchieta | Edited by Valéria Aguiar / Olga Bardawil
(c) 2016 Empresa Brasil de Comunicação S/A - EBC | Creative Commons Atribuição 3.0 Brasil
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