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Brazil 2015 inflation rate to hit 11-yr high
January 27, 2015, 4:09 am

File photo of a Brazilian supermarket [Xinhua]

File photo of a Brazilian supermarket [Xinhua]

Brazil’s inflation rate is expected to hit an 11-year high in 2015, the country’s central bank said on Monday.

Analysts expected that the annual inflation rate will rise from current 6.67 to 6.99 per cent, way above a central target of 4.5 per cent, and nearly half a percentage point over the government ceiling of 6.5 per cent, said the Central Bank’s weekly forecast.

The forecast figure will be the highest since inflation reached 7.6 per cent in 2004.

Market analysts also lowered their growth projections for the country’s gross domestic product (GDP), from 0.38 per cent last week to 0.13 per cent, marking the fourth time in a row that experts have downgraded their economic growth forecast.

The growth forecast for 2016 was also downgraded from 1.8 per cent to 1.54 per cent.

The financial market expects the country’s annual basic interest rate, currently at 12.25 per cent, to end the year at 12.5 per cent.

Analysts expect the interest rate to decrease in 2016 to 11.5 per cent.

The exchange rate forecast shows that the national currency is expected to end the year at 2.8 reals to the US dollar, and to close 2016 at 2.9 reals to the dollar.

Brazil’s trade balance is expected to register a surplus of $4.5 billion in 2015, and to more than double next year to $10 billion.

Foreign direct investment is expected to reach $60 billion in both 2015 and 2016.

 

Source: Agencies

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