Economy

Market sees higher benchmarking interest rate in Brazil in 2021

The weekly survey showed that the experts consulted started to see the so-called Selic at 3.13% at the end of next year

Headquarters of the Central Bank of Brazil
Headquarters of the Central Bank of Brazil, in Brasilia. March, 2020. Photo: REUTERS/Adriano Machado/File Photo
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  • The weekly survey showed that the experts consulted started to see the so-called Selic at 3.13% at the end of next year at the median of the projections, of 3.0% estimated before and against the 2.0% level that ends 2020;
  • The Top-5 institutions continue to see basic interest rates at 3.0% at the end of next year.

The market adjusted its estimates for the Brazilian economy and began to see the country’s benchmarking interest rate slightly higher in late 2021, according to the latest Focus survey released on Monday by the country’s Central Bank.

The weekly survey showed that the experts consulted started to see the so-called Selic at 3.13% at the end of next year at the median of the projections, of 3.0% estimated before and against the 2.0% level that ends 2020. The Top-5 institutions continue to see basic interest rates at 3.0% at the end of next year.

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For inflation, economists still calculate a rate of 4.39% in 2020 but reduced the forecast for the IPCA, the official inflation index, in 2021 to 3.34%, from 3.37%.

The center of the country’s official inflation target for 2020 is 4%. In 2021, analysts from the institutions interviewed by the Central Bank point to a rate of 3.75%, with a margin of tolerance of 1.5 percentage points up or down.

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For the Gross Domestic Product (GDP), the analysts surveyed by Focus estimate a contraction of 4.40% in 2020 and a growth of 3.49% in 2021 (slightly above the forecast of the previous week, of 3.46% ).

Translated by LABS

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