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Brazil's Central Bank forecasts 7.3% inflation this year


Agencia Brasil
27 Sep 2016

The Central Bank increased the forecast for this year's inflation. According to the estimates, the inflation, as measured by the National Broad Consumer Price Index (IPCA), is expected to stand at 7.3% in 2016, compared to the 6.9% predicted in June. The figures can be found in the Quarterly Report on Inflation, released today (27) in Brasilia.

The projection surpasses the 6.5% target ceiling and is way off the center of the target (4.5%), which should be pursued by the same bank.

Learn MoreBrazil financial market forecasts lower inflation this year

In 2017, the inflation is expected to lower and close out the period at 4.4%, against a previous 4.7%. The upper limit of the target for next year is 6%, with a 4.5% center.

To make these forecasts, the bank took into account data available up to September 22. In this scenario, the dollar was considered to cost R$3.30, along with the benchmark interest rate (SELIC), now at 14.25%.

Market scenario

In the report, the Central Bank also release figures for the market scenario on the exchange rate and the SELIC. In this landscape, the forecast for this year's inflation should also stand at 7.3%, compared to the 7% estimated in June. In 2017, the prediction reaches 4.9%, against a previous 5.5%.

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