Brazilian financial market analysts have once again raised their forecast for 2010 GDP growth, for the 14th consecutive week, in the latest Focus report, the weekly survey by Brazil’s Central Bank of banks and financial institutions.
The most recent market estimate for 2010 GDP growth is 7.06%, up from 6.99%, last week. In the same survey, the GDP growth forecast for 2011 remains steady at 4.5%.
Focus also found that market estimates of the public sector debt ratio to GDP dropped slightly from 41.20% to 41% for 2010.
As for the dollar, it is predicted by the market to be at 1.80 reais at the end of this year, and 1.89 reais at the end of 2011.
Market estimates for the trade balance was for a 2010 surplus of US$ 15.1 billion (up from US$ 15 billion a week ago). The forecast for 2011 is US$ 6 billion.
The current account deficit estimate for 2010 is US$ 47.57 billion (down from US$ 48.2 billion).
And, finally, estimates of total direct foreign investment for 2010 dropped from US$ 36 billion to US$ 35 billion. The forecast for 2011 remains at US$ 40 billion.
Focus also found that with regard to the 2010 inflation (as measured by the government’s yardstick – the Broad Consumer Price Index (“IPCA”) – the forecast remains steady at 5.61%, which is what market estimates were last week.
That is higher than the Luiz Inácio Lula da Silva administration’s target of 4.80%. However, the government’s target comes with an error margin of give or take 2 percentage points. And 5.61% is within that margin of error.
Now, as the tool used by the Central Bank to control inflation is the country’s benchmark interest rate, the Selic, it is significant to note that market estimates for the Selic at year’s end have now risen to 12% (up from 11.75% last week).
As for other inflation indicators, such as the General Price Indexes (“IGP-DI” and the “IGP-M”), the forecast is for both to be over 9% by the end of the year. However, another index, the “IPC-Fipe” is forecast to be only 5.30% at the end of the year, and, finally, controlled prices (preços administrados) are forecast to rise only 3.60%.
Brazil had a trade surplus of US$ 806 million in the third week of June (14 to 19) with exports of US$ 4.075 billion and imports of US$ 3,269 billion. The numbers are from the Ministry of Development, Industry and Foreign Trade. In the second week of June (7 to 12), there was a deficit of US$ 166 million.
For the month of June the cumulative surplus is US$ 1.785 billion, with exports of US$ 11.044 billion and imports of US$ 9.259 billion.
For the year, total exports have reached US$ 83.138 billion and imports US$ 75.744 billion, with a cumulative surplus of US$ $7.394 billion, down 40% from the same period last year (when the surplus was US$ 12.379 billion).