Brazil's financial market trims 2018 growth forecast to 1.5 pct
RIO DE JANEIRO, July 16 (Xinhua) -- Brazil's financial market on Monday reduced its 2018 economic growth forecast to 1.5 percent, half the initial estimate issued at the beginning of the year, according to the Central Bank of Brazil.
According to the Bulletin Focus, the issuing agency, which interviews a hundred analysts and economists from the Brazil financial market every Monday, the country's gross domestic product (GDP) was reduced from the 1.53 percent from the previous week.
Last week, Brazil's finance minister, Eduardo Guardia, said the government would be releasing its growth forecast for this year, placing it at 1.6 percent, below the 2.5 percent calculation in its previous forecast.
The small growth of the GDP is due to a slower than expected economic recovery, following the 2015 and 2016 recession - the worst in the country's history.
In 2017, Brazil's economy grew 1 percent, but the high unemployment rate and low consumer confidence, put the brakes on larger gains this year.
For 2019, the financial market kept its growth forecast at 2.5 percent, the same from last week.
In relation to inflation, the forecast shows a reduction following eight weeks of gains, falling from 4.17 to 4.15 percent.
The value means that inflation would be less than the government's goal of 4.5 percent and within allowed limits of 1.5 points above or below.
For the coming year inflation was placed at 4.1 percent, a level that is also below the goal of 4.5 percent but within the margin of 1.5 points set by the Central Bank.
As for the baseline Selic reference interest rate, it is at its lowest historical levels (6.5 percent), the financial market predicts it will stay the same until the end of the year and will rise to 8 percent in 2019.
In regards to the exchange market, the Brazilian real maintained its value at 3.7 units for one U.S. dollar for this year, the same as last week, but it will increase from 3.6 to 3.68 reales per U.S. currency in 2019.
At the same time, the market placed its commercial balance (exports minus imports) with its surplus of 57.81 billion U.S. dollars for this year, the same forecast as last Monday; while reducing it from 49.5 billion to 49.3 billion U.S. dollars for the coming year.