Brazil's financial market raises 2023 inflation forecast to 6.01%

Brasilia, April 18 The Central Bank of Brazil said that financial analysts have raised the inflation forecast for this year from 5.98 per cent to 6.01 per cent, and from 4.14 per cent to 4.18 per cent for next year.

Target inflation in Brazil is 3.25 per cent this year and 3 per cent next year, in both cases with a margin of tolerance of 1.5 percentage points, reports Xinhua news agency.

According to the central bank's weekly "Focus" survey of the country's top financial institutions, despite the expected increase in inflation, analysts lowered the forecast for the benchmark interest rate, called Selic in Brazil.

The Selic forecast went from 12.75 per cent to 12.5 per cent for the end of 2023, to then gradually decline to 10 per cent by the end of 2024.

Regarding Brazil's gross domestic product (GDP), analysts downgraded the growth forecast for 2023 from 0.91 per cent to 0.9 per cent, and from 1.44 per cent to 1.4 per cent for 2024.

Brazil's currency, currently trading at 4.95 reals to the US dollar, is expected to trade at 5.24 reals to the dollar at the end of the year and at 5.26 at the end of the next.

The trade balance is projected to leave a surplus of $55.5 billion in 2023 and $52.3 billion in 2024.