SÃO PAULO, BRAZIL – Brazilian financial analysts upgraded slightly their economic growth forecast for 2020, from a five percent drop in gross domestic product (GDP) to a 4.81 percent drop, the Central Bank of Brazil said on Monday, October 27th.
They also downgraded their growth projection for 2021, from a 3.47 percent rise in the GDP to 3.42 percent.
According to the bank’s weekly survey of leading financial institutions in Brazil, analysts raised their inflation forecast for the end of the year, from 2.65 percent to 2.99 percent, and modified next year’s inflation projection from 3.02 percent to 3.1 percent.
The inflation figures fall within the government’s target rate of four percent in 2020 and 3.75 percent in 2021, with a 1.5 point margin of tolerance up or down.
Regarding the country’s trade balance, the analysts expect US$58 billion in trade surplus in 2020 and US$55 billion in surplus in 2021.
In an annual report on the Latin America’s largest economy dated October 5th, the International Monetary Fund (IMF) revised its forecast of 9.1 percent contraction to 5.8 percent decrease this year, praising the Brazilian government’s “swift and substantial” response to the economic recession prompted by the COVID-19 pandemic.
The IMF also warned the country still faces “exceptionally high” risks.