Brazil will grow less in 2011.
The Planning Ministry's projection for GDP, headed by Miriam Belchior, has fallen from 5% to 4,5%.
The government's projection for Gross Domestic Product (GDP) growth in 2011 has been reduced from 5% to 4,5%, according to the bimonthly report on revenue and expenditure assessments released today by the Ministry of Planning. At the same time, the document shows that the government acknowledges there will be higher inflation this year. The projection for the Broad Consumer Price Index (IPCA), which serves as a benchmark for monetary policy in Brazil, rose from 5% to 5,7% – still below the financial market's forecast, which estimates the IPCA at around 6.3%.
The projected increase for the General Price Index - Domestic Availability (IGP-DI) rose from 6,28% to 7,01%. According to the bimonthly report, the estimate for the average Selic rate (the basic interest rate of the economy) in 2011 decreased from 11.58% to 11,74% per year. The forecast for the average exchange rate fell from R$ 1,70 to R$ 1,61. The expectation for the average price of oil this year jumped from US$ 98,34 to US$ 103,31 per barrel. Finally, for the wage bill, the government expects growth of 11,71% this year, compared to 10,96% in the previous projection.