Brazil Forecasts 4.5% GDP Growth and 4% Inflation for Next Three Years

Brazil’s Minister of Planning, Budget, and Management, Paulo Bernardo, affirmed yesterday that the 2006 Budget Guidelines bill (LDO) foresees real GDP (Gross Domestic Product) growth of 4% for this year and 4.5% in 2006 and that this latter value should be repeated as the outlook for 2007 and 2008.

The GDP represents the sum of all wealth produced in the country. The Minister participated in a public hearing in the Joint Congressional Budget Commission to talk about the LDO 2006 project.


According to Bernardo, the LDO project also forecasts that inflation, measured by the National Consumer Price Index (INPC), will amount to 5.69% this year.


For 2006, the rate is expected to be 4.16%, and in the two subsequent years, 3.92% and 3.99%, respectively.


The INPC is calculated by the IBGE (Brazilian Institute of Geography and Statistics).


Regarding exchange rate projections, the Minister of Planning said that the real is expected to end this year with the US dollar worth an average of R$ 2.64.


This value should rise to R$ 2.90 in 2006 and slightly above R$ 3.00 in 2007.


ABr

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