Brazil’s Central Bank survey of the Brazilian market (the Focus report) found financial consultant’s estimates of GDP growth for 2010 steady at 7.55%, which is what it has been for three consecutive weeks. On the other hand, the market estimate for GDP growth in 2011 is 4.5% and has been for 45 consecutive weeks.
Expectations regarding industrial sector growth this year are at 11.30%, but for 2011, the estimate is 5.20%. As for net public sector debt as a percentage of GDP, the estimate for this year is close to 41%, falling just below 40% in 2011. The exact numbers varied between 40.94% and 40.89% for this year; and 39.67% and 39.64% for next year according to Focus.
Estimated trade surplus for this year is now at US$ 16 billion (up from US$ 15.85 billion a week earlier) and remains at US$ 9 billion for 2011.
The estimated current account deficit for this year is US$ 50 billion. The market expects it to rise to over US$ 63 billion in 2011.
Finally, direct foreign investment in Brazil this year is expected to reach US$ 30 billion, and US$ 36 billion (down from $38 billion) in 2011.
Financial market analysts told that they now estimate inflation this year, as measured by the Broad Consumer Price Index (“IPCA”), will reach 5.31%. This is the eighth consecutive week that the market has forecast an increase in inflation. Estimates over the last month, for example, have gone from 5.05% to 5.20, and then to 5.27%, and 5.29% and now 5.31%.
The government’s inflation target for 2010, as measured by the IPCA, is 4.5%, give or take two percentage points – in other words, as much as 6.5% would be acceptable. It should be noted that in Brazil some prices are government monitored/controlled: fuels, electricity, telephone, medicines, water, education, basic sanitation and urban transportation. They have their own separate category. Market estimates for “preços administrados” are for an increase of 3.50% this year (and 4.60% in 2011).
Cumulative official inflation as measured by the IPCA for the last twelve months, up to September, is 4.7%.
Meanwhile, the Weekly Consumer Price Index (“IPC-S”) closed out the month of October up 0.59%, down from an increase of 0.66% the week before. The IPC-S is a weekly economic survey by the Getúlio Vargas Foundation (FGV) that measures inflation based on prices of services and products in seven large urban centers.
As for interest rates, market analysts told Focus they believe the country’s basic interest rate (Selic) will remain at 10.75%. Market estimates for the Selic in 2011 were steady at 11.75%.
The Broad Consumer Price Index (IPCA) that the government uses as its inflation yardstick, closed out the month of October up 0.75%, (for the sake of comparison, it was up 0.45% in September) for a cumulative total for the last twelve months of 5.2%, and for the year (January to October) 4.38%. The numbers are from the government statistical bureau IBGE.
Rising food prices once again pushed inflation upward. The increase was 1.89% for the month (compared to 1.08% in September).
Beans, a stable in the Brazilian diet, are up slightly over 100% this year; jumping 31.42% in October. Beef was up 3.48% for the month.
The state where prices rose most in October was Goiás. Rio de Janeiro was where prices rose the least.