Brazilian financial market analysts and economists reduced their estimates for the country’s 2010 IPCA inflation rate for the third consecutive week, according to the Central Bank of Brazil’s market survey published Monday. The average estimate for the 2010 year-end IPCA rate was reduced to 5.35% from 5.42%. Despite the reduction, it is still above the central bank’s inflation forecast of 4.5% for the year.
The average estimate for 2011 inflation was maintained at 4.8%. The rolling 12-month IPCA inflation rate through June was 4.84%, according to the Brazilian census bureau, or IBGE. The central bank’s weekly survey tracks the opinions of 100 analysts and economists from banks and brokerages, reporting the average of their expectations.
In the meantime, the analysts’ average forecast for the benchmark Selic interest rate at the end of this year was reduced to 11.75% from 12%. Currently, the Selic is at 10.75%. For 2011, analysts maintained the Selic rate view at 11.75%.
Forecasts for the country’s 2010 gross domestic product growth were maintained at 7.2%. Estimates for 2011 were steady at 4.5%. Brazil’s GDP fell 0.2% last year. The average expectation for the debt/GDP ratio at the end of this year was increased slightly to 41% from 40.9%.
The forecast for the 2010 foreign-trade surplus was decreased to $15.41 billion from $16 billion. Analysts expect the current account deficit to rise to $48 billion from $47.4 billion by the end of this year.
Brazil’s real is expected to end this year at BRL1.80 to the U.S. dollar. On Friday, the real closed at BRL1.759.
by Rogerio Jelmayer, Dow Jones Newswires
