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%.