For banks, interest rates are rising. And inflation is falling just a little.

The Central Bank's Focus Bulletin shows that the market expects a price increase of 6,33% this year.

May 09, 2011, 14:14 AMUpdated May 20, 2019, 09:33 AM

AE - The financial market has raised its forecast for the Selic rate (the basic interest rate of the economy) at the end of 2012, from 12,00% to 12,25% per year, according to the Focus bulletin, released today by the Central Bank (BC). For the end of 2011, forecasts continued to point to a rate of 12,50% per year. Currently, the Selic rate is at 12,00% per year. Although the market has increased its expectation for the Selic rate at the end of 2012, analysts maintained their forecast for the Broad Consumer Price Index (IPCA) in 2012 at 5%. For 2011, however, the financial market slightly reduced its projection for official inflation, according to the Focus bulletin. The expectation for the rate this year fell from 6,37% to 6,33%, at a level still far from the center of the inflation target, which is 4,50% for the year. The target has a tolerance margin of two percentage points above or below. In the case of short-term inflation, the market raised its forecast for the IPCA (Brazilian consumer price index) for May 2011 from 0,43% to 0,45%.

The financial market maintained its projection for GDP growth in 2011 at 4,00%, according to the Focus bulletin. For next year, the projection for economic growth fell from 4,25% to 4,21%. The estimate for industrial production growth in 2011 decreased from 4,04% to 3,78%. For 2012, the projection for industrial expansion rose from 4,58% to 4,68%.

For the foreign exchange market, analysts predict that the dollar will end 2011 at R$ 1,62, the same value estimated the previous week. The projection for the average exchange rate throughout 2011 remained at R$ 1,61. For the end of 2012, the forecast for the exchange rate remained at R$ 1,70.

External accounts

The financial market maintained its forecast for the deficit in the external accounts in 2011. The forecast for the current account deficit this year remained at US$ 60,00 billion. For 2012, the current account deficit in the balance of payments was projected from US$ 69,50 billion to US$ 70,00 billion.

The forecast for the trade surplus in 2011 fell from US$18,05 billion to US$18,00 billion. For 2012, the estimate for the trade balance surplus remained at US$10,00 billion. Analysts raised their estimate for Foreign Direct Investment (FDI) inflows in 2011 from US$46,00 billion to US$50,00 billion. For 2012, the forecast remained at US$45,00 billion.

Source: Agência Estado

05/09/2011 08:55 - FN/EC/FOCUS/BC

Market raises forecast for interest rates in 2012

The financial market has raised its forecast for the Selic rate (the basic interest rate of the economy) at the end of 2012, from 12,00% to 12,25% per year, according to the Focus bulletin, released today by the Central Bank (BC). For the end of 2011, forecasts continued to point to a rate of 12,50% per year. Currently, the Selic rate is at 12,00% per year.

Although the market has increased its expectations for the Selic rate at the end of 2012, analysts maintained their forecast for the Broad Consumer Price Index (IPCA) at 5% for 2012. For 2011, however, the financial market slightly reduced its projection for official inflation, according to the Focus bulletin. The expectation for the rate this year fell from 6,37% to 6,33%, a level still far from the center of the inflation target, which is 4,50% for the year. The target has a tolerance margin of two percentage points above or below. In the case of short-term inflation, the market raised its forecast for the IPCA in May 2011 from 0,43% to 0,45%.

External accounts

Source: Agência Estado