Brazilian Economy Growth Forecast 3.45% for 2021; Inflation within 3.75% Target Margin

RIO DE JANEIRO, BRAZIL – Brazilian financial and market analysts upgraded their economic growth forecast for 2021, from 3.41% to 3.45%, and maintained the projection at 2.5% for 2022, the Central Bank of Brazil announced Monday, January 18th.

According to the bank’s weekly survey of the country’s top financial institutions, the analysts also increased estimated inflation for 2021 from 3.34% to 3.43%, but kept it at 3.5% for next year.

The inflation forecast falls within the government’s target goal of 3.75% in 2021 and 3.5% in 2022, with a 1.5-percentage point margin of tolerance.

Regarding the benchmark interest rate Selic, the forecast remained at 3.25% by the end of 2021 and at 4.75% by the end of 2022.

Analysts kept their projection for the Brazilian currency, which currently stands at 5.3 reais against 1 U.S. dollar, at 5 reais at the end of 2021 and 4.9 reais in December 2022.

Likewise the trade balance is expected to deliver a surplus of US$55 billion in 2021 and US$50 billion in 2022. Finally foreign direct investment is expected to reach US$60 billion in 2021 and US$70 billion the following year.