Brazil economists trim forecast for rate hikes | Fin24
 
In partnership with
  • Ferial Haffajee

    Why Minister of Public Enterprises Pravin Gordhan’s patriotism call to fly SAA flopped.

  • Solly Moeng

    State capture is meant to be over, but we aren't free if its beneficiaries go unpunished.

  • South African Airways

    A business rescue practitioner has been appointed to try and save the struggling flag carrier.

Loading...

Brazil economists trim forecast for rate hikes

Aug 01 2016 16:45
David Biller

Rio de Janeiro - Brazil economists forecast the central bank will be less aggressive when cutting interest rates this year as inflation remains sticky and a new board signalled resistance to looser policy.

Economists’ median forecast for the benchmark rate at year-end rose to 13.5% from 13.25% the prior week, marking the first increase in the central bank’s weekly Focus survey since June.

The Selic currently stands at 14.25%, its highest level in nearly 10 years.

Brazil’s inflation in the month through mid-July caught most economists off guard, accelerating by more than all but one of their estimates. Headline IPCA inflation is still running at nearly double the 4.5% target, and economists surveyed by the central bank only see it slowing to 7.21% by year-end.

The central bank’s monetary policy committee has held the Selic at its current level for eight straight meetings, even after Ilan Goldfajn took over as the bank’s president and Acting President Michel Temer said he hoped the monetary authority would lower borrowing costs. Most recently, board members voted unanimously after their July 19 to 20 meeting to keep the Selic unchanged.

"All board members acknowledged progress in the disinflation outlook for the Brazilian economy, but expressed concern about inflation expectations," policy makers said in minutes of their first meeting under Goldfajn.

Read Fin24's top stories trending on Twitter: Fin24’s top stories

brazil  |  economy
NEXT ON FIN24X

 
 
 
 

Company Snapshot

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...