Wednesday , January 27 2021

The market forecasts inflation of 4.23% in 2018, lower than expected – Economy




Inflation of the year should reach the target set by the Central Bank, Focus Bulletin's projections show
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Inflation of the year should reach the target set by the Central Bank, Focus Bulletin's projections show

Analysts of financial institutions reduced inflation projections for the third consecutive year. Information was released on Monday (12) by the Central Bank (BC) through Focus Bulletin.

Read also: In October, the withdrawal rate of the savings was higher than the deposit

According to the report, the index of the broad national consumer price index (IPCA), which measures inflation
countries should remain at a level of 4.23%. In the last week's discovery, the value was 4.40%, a decrease of 0.23 percentage points.

The expectation is below the inflation target set by the Central Bank in 2018, which is 4.5% within the margin of error (ranging from 3% to 6%). Having an annual goal is achieved within this parameter.

For 2019, BC is 4.25% with a tolerance of 2.75% and 5.75%. For the next year, the value remains stable for the year 2020, at 4%, and decreases to 2021, reaching 3.75%.

Read also: Work Reform ends one year with job creation less than expected

The Sibenik rate should remain stable at 6.5% per annum


Lower inflation expectations do not change the Selic rate, stable at 6.5%
Marcello Casal Jr / Agência Brasil

Lower inflation expectations do not change the Selic rate, stable at 6.5%

To achieve the inflation target, the central bank uses the base interest rate, known as Rate Selic
, raising or lowering as required.

According to the Focus Bulletin, the expectation is 6.5% per annum and should remain stable by the end of 2018. The base rate is expected to increase by the end of the period by 8% annually and remain at that level in 2020 and 2021 for the next year.

The increase in the rate created by the Monetary Policy Committee (Copo) indicates an intention to contain heated demand that causes price effects, as higher interest rates increase the loan and encourage savings.

The maintenance of the basic interest rate as foreseen for this year suggests that Cop will consider the previous changes that are sufficient to achieve the inflation target.

Other forecasts in the Focus Bulletin


In addition to inflation calculations, estimates show stability in GDP growth, which should be 1.36% in 2018
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In addition to inflation calculations, estimates show stability in GDP growth, which should be 1.36% in 2018

Estimates were recorded in the last week's report
and the last held in October
(GDP), which is the sum of all products produced in the country. For 2018, the expectation is 1.36%, and the projection for the next three years, 2019, 2020 and 2021, is 2.50%.

In addition to GDP summaries i inflation
, Focus Bulletin also measures dollar expectations, which remains at R $ 3.70 for 2018 and dropped from R $ 3.80 to R $ 3.76 at the end of 2019.


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