Market lowers inflation estimate and sees higher GDP increase in 2023 and 2024

Market lowers inflation estimate and sees higher GDP increase in 2023 and 2024



Market estimate for inflation for this year fell to 4.86%, but still exceeds the target ceiling set by the government. Numbers were released this Monday (18) by the BC. Financial market economists reduced the inflation estimate for 2023 and 2024 and also began to predict a greater expansion of the economy in both years. The information is contained in the “Focus” report, released this Monday (18) by the Central Bank. The survey heard from more than 100 financial institutions last week about projections for the economy. In the case of the inflation projection for 2023, financial market analysts lowered the value from 4.93% to 4.86% last week. Even so, analysts’ estimates for 2023 inflation still remain above the target ceiling defined by the National Monetary Council (CMN). The central inflation target is 3.25% this year, and will be considered formally met if the index oscillates between 1.75% and 4.75% this year. According to BC research, the financial market lowered its estimate for next year’s inflation from 3.89% to 3.86%. Special g1: what is inflation Understand: how inflation affects your pocket For 2024, the inflation target, defined by the National Monetary Council (CMN), is 3% and will be considered met if it oscillates between 1.5% and 4 .5%. To define the basic interest rate and try to contain the rise in prices, the BC is already targeting, at this moment, the target for next year and the objective, in 12 months, for the beginning of 2025. If the financial market projection If confirmed, this will be the third year in a row of the inflation target being exceeded, that is, in which the IPCA is above the ceiling set by the government. In 2022, inflation totaled 5.79%. The higher the inflation, the lower people’s purchasing power, especially those who receive lower salaries. This is because the prices of products increase, without wages keeping up with this growth. Gross Domestic Product Regarding the result of the Gross Domestic Product (GDP) for 2023, the financial market raised the forecast, from 2.64% to 2.89%. GDP is the sum of all goods and services produced in the country. The indicator serves to measure the evolution of the economy. For 2024, the financial market’s economic growth forecast rose from 1.47% to 1.50%. The forecast of greater economic growth comes after the announcement that the Gross Domestic Product (GDP) in the second quarter of this year increased by 0.9%, well above analysts’ expectations. Interest rate Financial market economists maintained their estimates for the basic interest rate of the Brazilian economy for the end of this year and 2024. For the end of 2023, the financial market maintained its projection for the Selic rate at 11.75% per year. For the end of 2024, the market projection for the economy’s basic interest rate remained 9% per year. Other estimates See below other financial market estimates, according to the BC: Dollar: the projection for the exchange rate for the end of 2023 fell from R$5 to R$4.95. For the end of 2024, it fell from R$5.02 to R$5. Trade balance: for the balance of trade (result of total exports minus imports), the projection rose from R$70.1 billion for US $70.4 billion surplus in 2023. For 2024, the expectation for a positive balance remained at $60 billion. Foreign investment: the report’s forecast for the entry of foreign direct investment into Brazil this year continued at US$80 billion. For 2024, the estimated inflow was also stable at US$80 billion. VIDEOS: economic news



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