Brazil's financial outlook for 2024 remains stable despite monetary policy adjustments

(MENAFN) Brazil's financial outlook for 2024 remains stable, with the country's Central bank indicating minimal adjustments to its economic growth forecasts despite recent monetary policy changes. According to the weekly Focus survey conducted by the bank among leading financial institutions, analysts marginally revised Brazil's GDP growth forecast for 2024 from 2.08 percent to 2.09 percent, while maintaining a steady projection of 2 percent growth for 2025.

In its latest decision, the Monetary Policy Committee (Copom) opted to maintain the Selic rate, Brazil's benchmark interest rate, at 10.50 percent annually. Analysts anticipate this rate to remain unchanged for the remainder of the year, with gradual easing expected to bring it down to 9.50 percent by next year.

Concerning inflation, analysts adjusted their forecast slightly upwards, from 3.96 percent to 3.98 percent for 2024, and from 3.80 percent to 3.85 percent for 2025. These projections fall within Brazil's official target range of 3 percent, with a tolerance band of 1.5 percentage points above or below.

In terms of currency exchange, where the Brazilian real currently trades at approximately 5.40 reals to the U.S. dollar, analysts predict a modest appreciation to around 5.15 reals per dollar by the end of this year and into next year.

The balance of trade is expected to show a surplus of USD81.78 billion in 2024, slightly decreasing to USD76 billion in 2025, reflecting ongoing trade dynamics and economic policies. Foreign direct investment (FDI) into Brazil is projected to reach USD70 billion in 2024, increasing marginally to USD73 billion in 2025, highlighting continued investor confidence in the Brazilian market despite economic uncertainties.

Overall, Brazil's financial market outlook for 2024 demonstrates cautious optimism amid economic policy adjustments and global economic conditions, with indicators suggesting measured growth and stability across key economic metrics.



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