Economists expect inflation to dip below 4.0% in 2017, while forecast GDP increases to 0.50% – Focus Report

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Economists surveyed by the Central Bank of Brazil cut inflation forecasts below 4% for the first time this year.

The outlook for inflation fell for the tenth week in a row, with IPCA estimates now at 3.93% for this year, down from 4.01% last week. For 2018, there was also a reduction of 0.03 percentage points for price levels, with the rate of inflation expected to close the year at 4.36%.

In light of softer inflation, economists remain committed to their forecast of a 1% cut in the Selic rate – currently at 11.25% – at the end of this month. By the end of the year and next, the projection that the Selic will close at 8.50% was unchanged.

In relation to Gross Domestic Product (GDP), the forecast improved for a fourth week, reaching 0.50%, from 0.47% last week. In 2018, there was no change in the number, with GDP expected to reach 2.5%.

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