Projection of inflation falls from 4.16% to 4.05% this year
Financial institutions consulted by the Central Bank (BC) reduced the estimate of economic growth and inflation to 2018. The information appears in the Focus bulletin, published weekly by the BC, with projections for the main economic indicators. The estimate for the Broad Consumer Price Index (IPCA) rose from 4.16% to 4.05% this year. The reduction occurred after the August deflation (0.09%), released on Thursday (6) by the Brazilian Institute of Geography and Statistics (IBGE). For 2019, the projection for the IPCA remains at 4.11%. By 2020, the estimate continues at 4% and for 2021 it went from 3.92% to 3.87%.
For 2018 and 2019, estimates are below the target center that should be pursued by the BC this year, 4.5%, with a lower limit of 3% and a higher limit of 6%. For 2019, the target is 4.25%, with a tolerance interval of 2.75% and 5.75%. For 2020, the target is 4% and 2021, 3.75%, with a tolerance interval of 1.5 percentage points for the two years (2.5% to 5.5% and 2.25% to 5.25 %, respectively). In order to reach the inflation target, the BC uses the basic interest rate (Selic), currently at 6.5% per year. According to the financial market, Selic should remain at 6.5% per year until the end of 2018. By 2019, the expectation is to increase the base rate, ending the period at 8% per year and remaining at that level in 2020 and 2021.
The projection for the expansion of the Gross Domestic Product (GDP) - the sum of all goods and services produced in the country - was reduced from 1.44% to 1.40% this year. For 2019, 2020 and 2021, the estimate for GDP growth continues at 2.5%. The forecast of the financial market for the dollar quotation remains at R $ 3.80 at the end of this year and at R $ 3.70 at the end of 2019.
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