Brasilia, April 4 : The Central Bank of Brazil said the country’s financial market has raised its inflation forecast for this year from 5.93 per cent to 5.96 per cent, but maintained its 2024 forecast at 4.13 per cent.
Brazil’s target inflation is 3.25 per cent for 2023 and 3 per cent for 2024, both with a 1.5 percentage point margin of tolerance, reports Xinhua news agency.
The rise in expected inflation this year may impact any potential decisions by the bank to lower the benchmark interest rate, currently at 13.75 per cent annually, since raising the rate serves to dampen an overheated economy.
According to the bank’s weekly survey of the country’s top financial institutions, market analysts maintained their forecast for the benchmark rate to dip to 12.75 per cent by the end of the year, then gradually drop to 10 per cent annually in 2024.
Analysts also maintained their forecast expansion in Brazil’s 2023 gross domestic product (GDP) at 0.90 per cent, but raised it from 1.40 to 1.48 per cent for 2024.
Regarding the currency exchange market, Brazil’s real, which now trades at 5.07 to the US dollar, was forecast to trade at 5.25 by the end of this year and at 5.30 next year.
The trade balance (exports versus imports) is expected to see a surplus of $55 billion in 2023 and $52.44 billion in 2024.
Meanwhile, foreign direct investment in Brazil is projected to reach $80 billion, both in 2023 and in 2024.
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