Loading ...News - Brazil’s GDP May Shrink Less Than Previously Forecast
July 13 (Bloomberg) -- Brazil’s economy may contract less than previously expected this year, raising speculation policy makers may pause after cutting interest rates for a fifth straight time next week.
Economists covering Brazil’s economy predict gross domestic product will shrink 0.34 percent in 2009, compared with a forecast for a 0.50 percent drop a week earlier, according to the median forecast in a July 10 central bank survey of about 100 economists published today. The central bank will to cut the so-called Selic rate to a record 8.75 percent on July 22 and hold it at that level through year-end, the survey showed.
“The economy has proven more resilient than expected, leading to a little more caution by policy makers,” Roberto Padovani, chief economist at Banco WestLB in Sao Paulo, said in a telephone interview. “We also see inflation in Brazil has a certain resistance.”
Economists expect annual inflation will slow to 4.5 percent by year-end from the current 4.80 percent, survey showed. Previously, economists expected a year-end annual rate of 4.42 percent.
Policy makers target an annual inflation rate of 4.50 percent, plus or minus two percentage points to accommodate for unexpected price shocks.
The real gained 0.3 percent to 1.99021 per dollar at 8:37 a.m. New York time from 1.9958 on July 10.
Source: Bloomberg.
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