Economy

Brazil lowers predicted GDP growth to 1.6% this year

The estimate for inflation, in turn, went from 3.8% to 4.2%

Kelly Oliveira

Published on 28/06/2018 - 15:35

Brasília

Brazil’s Central Bank reduced its projection for the growth of the economy this year. The estimated increase of the country’s gross domestic product (GDP) was revised from 2.6% to 1.6%, according to a report on inflation, released today (Jun. 28).

The estimate is slightly above that of the financial market—1.55%.

The inflation forecast for this year, in turn, rose. The official rate, known as IPCA, went from 3.8% to 4.2%.

The projection is based on the perspective of the financial market for interest (6.5% per annum) and the dollar (R$3.63 at the end of 2018).

The estimate is near the center of the target for the inflation (4.5% this year). For 2019, the center of the target stands at 4.25%, and 4% for 2020. Variations are tolerated within 1.5 percentage points, plus or minus.

For 2019, the official forecast for the inflation slipped from 4.1% to 3.7%. The estimate for 2020 dropped from 4.1% to 3.7%.