Brazil's financial market raises 2023 inflation forecast to 5.96 pct

BRASILIA, April 3 (Xinhua) -- The Brazilian financial market raised its inflation forecast for this year from 5.93 percent to 5.96 percent, but maintained its 2024 forecast at 4.13 percent, the Central Bank of Brazil said Monday.

Brazil's target inflation is 3.25 percent for 2023 and 3 percent for 2024, both with a 1.5 percentage point margin of tolerance.

The rise in expected inflation this year may impact any potential decisions by the bank to lower the benchmark interest rate, currently at 13.75 percent annually, since raising the rate serves to dampen an overheated economy.

According to the bank's weekly survey of the country's top financial institutions, market analysts maintained their forecast for the benchmark rate to dip to 12.75 percent by the end of the year, then gradually drop to 10 percent annually in 2024.

Analysts also maintained their forecast expansion in Brazil's 2023 gross domestic product (GDP) at 0.90 percent, but raised it from 1.40 to 1.48 percent for 2024.

Regarding the currency exchange market, Brazil's real, which now trades at 5.07 to the U.S. dollar, was forecast to trade at 5.25 by the end of this year and at 5.30 next year.

The trade balance (exports versus imports) is expected to see a surplus of 55 billion dollars in 2023 and 52.44 billion dollars in 2024.

Meanwhile, foreign direct investment in Brazil is projected to reach 80 billion dollars, both in 2023 and in 2024.