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17/07/2017 - 13:02hs

Inflation forecast drops for 5th time

The median of estimates for whole-year 2017 inflation rate from financial market players declined to 3.08%. In 2018 inflation is expected to be 4.19%, according to the Brazilian Central Bank’s Focus bulletin.

Brasília – The median of estimates from Brazilian financial market players regarding inflation in 2017 and 2018 declined once again. The forecast for the Extended Consumer Price Index (IPCA) changed down from 3.26% to 3.08% regarding 2017, and from 4.31% to 4.19% regarding 2018. This is the fifth back-to-back drop in the rate forecast as per the Brazilian Central Bank’s Focus bulletin made public this Monday (17). The projections are lower than 4.5%, which is the midpoint of the monetary authority’s target range.

Respondents of the Central Bank’s poll expect the benchmark interest rate, known as Selic, to end both 2017 and 2018 at 8% per annum, down from 8.25% in last week’s poll. The Gross Domestic Product (GDP) growth forecast remained flat both for 2017, at 0.34%, and for 2018, at 2%.

Industrial output is seen improving, with growth projections going from 0.84% to 0.97%, and remaining level at 2.3% in 2018.

*Translated by Gabriel Pomerancblum

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