Brazil lowers inflation forecast for end of 2024 to 4.63 percent
Date
11/28/2024 4:05:33 AM
(MENAFN) Brazil’s financial market has revised its inflation forecast for the end of 2024, lowering it slightly from 4.64 percent to 4.63 percent, according to the Central bank of Brazil’s weekly survey. This marks the first dip in the forecast in 18 weeks, signaling a marginal improvement in inflation control. However, the forecast remains above the bank’s 3 percent inflation target, with a tolerance ceiling of 4.5 percent, due to rising consumer prices driven by increased costs for electricity and food, partly caused by a major drought.
Despite this, analysts are optimistic about Brazil’s economic performance. The bank raised its inflation forecast for 2025 to 4.34 percent, up from the previous estimate of 4.12 percent. Meanwhile, the GDP growth forecast for 2024 has been upgraded from 3.10 percent to 3.17 percent, reflecting an overall positive outlook for the Brazilian economy, with a slightly higher growth prediction for 2025 as well (from 1.94 percent to 1.95 percent).
Interest rates are also expected to remain relatively high, with analysts forecasting the benchmark interest rate at 11.75 percent by the end of 2024, rising to 12.25 percent in 2025. Meanwhile, the Brazilian real is expected to stabilize at 5.70 to the US dollar by the end of 2024 and further appreciate to 5.55 by 2025.
In terms of trade and investment, analysts predict Brazil will achieve a trade surplus of USD75 billion in 2024, slightly increasing to USD76.3 billion in 2025. Foreign direct investment is expected to remain robust, with projections of USD71.55 billion in 2024 and USD73.56 billion in 2025, indicating continued confidence in Brazil’s economy.
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