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Brazil's financial market forecasts smaller 4.55 pct drop in 2020 GDP

Xinhua News,BRASILIA
2020-11-24 06:11

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BRASILIA, Nov. 23 (Xinhua) -- Brazil's private-sector financial analysts are forecasting a smaller contraction in economic growth in 2020 than previously projected, from a drop of 4.66 percent to 4.55 percent in gross domestic product (GDP), the Central Bank of Brazil said on Monday.

Analysts also upgraded their growth forecast for 2021, from an expansion of 3.31 percent to 3.4 percent in GDP, according to the bank's weekly survey of the country's main financial institutions.

The market raised its inflation forecast, from 3.25 percent to 3.45 percent for the end of this year and from 3.22 percent to 3.4 percent for the end of next year.

Both forecasts fall within the government's target rate of 4 percent inflation in 2020 and 3.75 percent inflation in 2021, with a 1.5 percent margin of tolerance up or down.

Their 2020 forecast for the benchmark interest rate remained unchanged at the current level of 2 percent, but rose from 2.75 percent to 3 percent for 2021.

Regarding the trade balance (balance of exports and imports), analysts expected 57.73 billion U.S. dollars of surplus in 2020 and 55.1 billion U.S. dollars of surplus in 2021.

Foreign direct investment in Brazil is forecast to reach 45 billion U.S. dollars in 2020 and 60 billion U.S. dollars in 2021.
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