Central Bank reduces economic growth forecast for 2014
The seat of Brazil's Central Bank in Brasília
Brazil's Central Bank (BC) estimates the country's economic expansion for 2014 at 0.2%. The new prediction for the GDP growth can be found in the Report on Inflation for the fourth quarter, released Tuesday (Dec 23). The forecast is 0.5 percentage points below what had been projected in the previous report. BC also announced that the GDP is expected to grow by 0.6% in upcoming four quarters, up to September, 2015.
As for the National Broad Consumer Price Index (IPCA), the financial institution also foresees a 6.4% inflation rate for 2014, 6.1% for 2015, and 5% for 2016, taking into consideration the data available until December 5, 2014, the benchmark scenario, which assumes the dollar to hold at R$2.55, and the Selic target to stand at 11.75% per annum.
The report further highlights that, in the market scenario, which gathers data from the study conducted by the Department for Relations with Investors and Special Studies, projections indicate the inflation rate at 6.4% in 2014, 6% in 2015, and 4.9% in 2016.
In an attempt to curb the inflation, BC reiterates the stance adopted by the Monetary Policy Committee, which has argued that, at times like today, “the monetary policy should be particularly watchful, so that elevated inflation levels—like those observed over the last 12 months—do not linger on the relevant horizon. […] So the committee will do whatever is necessary so that next year the inflation enters a long period of decline, which would bring it to the 4.5% target in 2016.”
Translated by Fabrício Ferreira
Fonte: Central Bank reduces economic growth forecast for 2014
