Loading ...News - Brazil GDP May Shrink Less Than Previously Forecast
June 15 (Bloomberg) - Brazil’s economy may shrink less than previously forecast this year after gross domestic product posted a smaller-than-expected contraction in the first quarter.
Economists covering Brazil’s economy predict GDP will contract 0.55 percent in 2009, compared with a previous forecast for a 0.71 percent drop, according to the median forecast in a June 12 central bank survey of about 100 economists published today.
“The worst is over and Brazil’s economy is showing signs of recovering,” President Luiz Inacio Lula da Silva said today on his weekly nationwide radio broadcast. “I hope business leaders realize now that our workers and consumers can sustain our economy.”
Consumer and government spending is helping offset a plunge in investment and exports that has pulled Latin America’s biggest economy into its first recession since 2003. Policy makers, after cutting the benchmark interest rate to a record 9.25 percent last week, said they will be more “parsimonious” in the future.
Economists expect the central bank to cut the benchmark interest rate by a quarter of a percentage point to 9 percent on July 10, the smallest reduction this year, according to the median forecast in the central bank survey published today. Policy makers cut the so-called Selic rate by at least one percentage point at each of its four meetings this year.
Brazil’s economy contracted 1.8 percent in the first quarter, less than median forecast for a 2.8 percent contraction in a Bloomberg survey.
The real weakened 0.8 percent to 1.9413 per dollar at 10:06 a.m. New York time from 1.9260 on June 12.
Source: Bloomberg.
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