Market raises inflation forecast to 5,71%
The estimate for this year is increasingly distant from the center of the inflation target, of 4,5%; for 2014, the forecast remains at 5,5%, the same as it has been for 13 weeks, according to financial market analysts consulted by the Central Bank.
Kelly Oliveira
Reporter from Agência Brasil
Brasilia – Financial market analysts consulted by the Central Bank (BC) have raised their inflation projection for this year for the sixth consecutive week. The estimate for the Broad National Consumer Price Index (IPCA) rose from 5,68% to 5,71%. The projection for 2014 remains at 5,5%, the same as it has been for 13 weeks.
The projection for this year is increasingly distant from the center of the inflation target, which is 4,5%. The Central Bank is still working with a margin of 2 percentage points above or below. It is the Central Bank's job to ensure that inflation converges to the center of the target.
One of the instruments used by the Central Bank to influence economic activity and calibrate inflation is the basic interest rate, the Selic. For financial institutions, in 2013, this rate should remain at 7,25% per year. For 2014, the expectation is that the Central Bank will raise the rate, which should end the period at 8,25% per year.
The Central Bank's survey of analysts also provides an estimate for inflation as measured by the Consumer Price Index of the Foundation Institute of Economic Research (IPC-Fipe), which was adjusted from 5,07% to 5,34% this year, and from 4,95% to 5% in 2014.
The projection for the General Price Index – Domestic Availability (IGP-DI) was changed from 5,16% to 5,17% this year, and maintained at 5% next year. For the General Market Price Index (IGP-M), there was a change from 5,09% to 5,21% in 2013, and from 5,19% to 5,20% in 2014.
Editing: Lílian Beraldo