|
In
its quarterly inflation report, the central bank said that
inflation in the quarter ending in November came 40 basis points
lower than policymakers had estimated in September. This was
primarily attributed to lower-than-expected prices in regulated
sectors, especially fuels, and industrial goods.
While acknowledging that this movement led the market to project
a "significant decline" in inflation for this year, the central
bank emphasized that "there was no significant change in the
median expectations for the coming years, which remain
unanchored."
In the report, the central bank raised its own inflation
projection for 2026, which had not yet been disclosed, to 3.2%,
up from the 3.1% seen in September. Last week, the central bank
released its inflation estimates of 3.5% for 2024 and 3.2% for
2025, with the target for all these years set at 3%.
Private economists surveyed weekly by the central bank
anticipate inflation at 3.93% next year and at 3.5% in 2025 and
2026.
Against this backdrop, policymakers reiterated their plan for
additional 50 basis point interest rate cuts in the upcoming
rate-setting meetings, asserting that this pace is appropriate
to keep the necessary contractionary monetary policy for the
disinflationary process.
The maintenance of a steady outlook for its next steps, signaled
since last week, disappointed some economists who saw room for
larger rate cuts in the future amid a slowdown in local
inflation and improvements in the global scenario.
GDP
The central bank slightly raised its economic growth forecast
for this year to 3.0% from the previously projected 2.9% in
September, while worsening the outlook for a 1.7% increase next
year from 1.8% before.
Policymakers wrote they see "moderation in household
consumption, a resurgence of investments, and the maintenance of
a favorable balance in external accounts" in 2024.
Brazil's current account deficit is set to increase to $35
billion next year from $26 billion this year, the central bank
projected, influenced by a smaller trade surplus. Policymakers
expect the trade balance to remain positive at $73 billion next
year, down from $79 billion this year.
Regarding bank lending, the central bank forecasts a rise of
8.8% in 2024, accelerating from the 6.8% expansion estimated for
this year.
(Reporting by Marcela Ayres; Editing by Steven Grattan and Chizu
Nomiyama)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
