Market reduces inflation expectation and projects interest of 4.5% per year at the end of 2019

The financial market economists reduced the inflation estimate for this year and also the forecast for the basic interest of the economy at the end of 2019-which went from 4.75% to 4.5% per year. The projections are listed in the market bulletin known as the "Focus" report, released on Monday (21) by the Central Bank (BC). The report is a result of a survey made last week with more than 100 financial institutions. According to the institution, financial market analysts lowered the inflation estimate for this year from 3.28% to 3.26%. It was the eleventh consecutive fall in this indicator. With this, the expectation of market inflation for 2019 follows below the central target, of 4.25%. The tolerance range of the target system varies from 2.75% to 5.75%. The inflation target is fixed by the National Monetary Council (CMN). To achieve this, the Central bank raises or lowers the basic interest rate of the economy (Selic). For 2020, the financial market lowered the inflation estimate from 3.73% to 3.66%. Next year, the central inflation target is 4% and will have been officially fulfilled if the IPCA oscillating between 2.5% and 5.5%. Basic interest rate Market analysts also downloaded from 4.75% to 4.5% per year the forecast for the Selic rate at the end of 2019. In mid-September, the Central Bank's Monetary Policy Committee (COPOM) reduced the basic interest of the economy from 6% to 5.5% per year-new historical floor. The following week, through the minutes of the meeting, the BC projected inflation below the target for 2019 and 2020 and indicated a new cut in the basic interest of the economy. To the end of 2020, the financial market maintained its forecast for the Selic rate at 4.75% per year. With this, analysts expect a small interest rate in the next year. Gdp For this year, the high estimate of gross domestic product (GDP) rose from 0.87% to 0.88%. For 2020, GDP growth forecast continued by 2%. The GDP is the sum of all goods and services made in the country, regardless of the nationality of those who produce them, and serves to measure the behavior of the Brazilian economy. For 2019, the Central bank's forecast is a 0.9% high, and the Ministry of Economy is a 0.85% growth. Other estimates Dollar-the projection of the financial market for the exchange rate at the end of 2019 remained at R $4 per dollar. For the closing of 2020, it advanced from R $3.95 to R $4 per dollar. Trade balance – for the balance of the trade balance (result of total exports minus imports), the projection in 2019 declined from US $50.43 billion to US $48.85 billion of positive result. For next year, the estimate of market specialists has declined from US $47 billion to US $45 billion. Foreign investment-The forecast of the report for the entry of foreign direct investments in Brazil, in 2019, declined from US $81.85 billion to US $80 billion. For 2020, analysts ' estimates went from US $83.20 billion to US $80 billion.