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LATIN AMERICA |
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Brazilian Inflation And Interest Rates
Forecasted To Increase in 2010
BRASILIA - The Brazilian economy is
forecasted to expand 0.21% in 2009 according
to a Central Bank poll among financial
experts and which is published weekly in the
Focus Bulletin. In the previous edition the
growth estimate was 0.20%.
However for 2010 the expansion rate forecast
remains at 5% as has been for the last three
weeks.
The experts’ poll shows that inflation and
interest rates for 2009 and 2010 will be
higher than originally estimated.
Inflation (better identified as the broad
consumer price index or IPCA) is estimated
to reach 4.26% this year up from the 4.25%
of last week, and 4.48% in 2010, compared to
the 4.25% of a week ago.
The basic interest rate or Selic is
forecasted to end 2009 at 8.75%, (a record
low), but by the end of next year should be
at 10.6%, up from 10.5%.
Meantime Finance Minister Guido Mantega said
on Monday that there are not going to be any
new surprise regarding foreign exchange
policies for the rest of the year.
Foreign investors have seen two new taxes
added to capital markets this year mainly
the 2% tax on foreign inflows into stocks
and bonds and a new 1.5% tax on investors
who are selling Brazilian stocks in order to
buy the same US depositary receipts listed
on the New York Stock Exchange.
The massive inflow of funds to Brazil has
made the local currency, Real soar 30%
against the US dollar so far this year,
boosting imports but making Brazilian
exports less competitive in foreign markets.
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