RIO DE JANEIRO, BRAZIL – Market analysts in Brazil, consulted weekly by the Central Bank to prepare the Focus report with the median of its economic projections, have slightly raised their inflation estimate for this year from 5.03% to 5.09%.
This would represent half of the rise recorded last year, which would be partly a consequence of an increase in the interest rate from 9.25% to 11.75% per year in the coming months.
In turn, the exchange market is expected to remain fairly stable and the market expects the dollar to trade at R$5.60 at the end of the year, just above its current level (yesterday it closed at R$5.52).
In terms of activity, projections are not very encouraging as GDP is expected to grow only 0.29% this year, which would mark a decline from the growth achieved in 2021. Yesterday, the Central Bank released its economic activity index, which showed an increase of 0.69% in November compared to October.
On the foreign front, positive numbers are expected with a trade surplus of US$56 billion, lower than in 2021 due to the impact of lower prices for commodities of which Brazil is a major exporter.
According to analysts, the fiscal result will show an imbalance in the primary result of 0.96% of GDP and 7.88% in the case of the nominal result.
Forecasts for Brazil reflect that the economy will show very little dynamism this year, something that is not good news for Argentina, its main trading partner.