Brazil's financial market forecasts 4.81 pct drop in GDP in 2020

Xinhua
27 Oct 2020, 09:14 GMT+10

BRASILIA, Oct. 26 (Xinhua) -- Brazilian financial analysts upgraded their economic growth forecast for 2020, from a 5 percent drop in gross domestic product (GDP) to a 4.81 percent drop, the Central Bank of Brazil said on Monday.

They also downgraded their growth projection for 2021, from a 3.47 percent rise in the GDP to a 3.42 percent rise.

According to the bank's weekly survey of leading financial institutions in Brazil, analysts raised their inflation forecast for the end of the year, from 2.65 percent to 2.99 percent, and modified next year's inflation forecast from 3.02 percent to 3.1 percent.

The inflation figures fall within the government's target rate of 4 percent in 2020 and 3.75 percent in 2021, with a 1.5 point margin of tolerance up or down.

Regarding the country's trade balance, the analysts expect 58 billion U.S. dollars in trade surplus in 2020 and 55 billion dollars in surplus in 2021.

In an annual report on the Latin America's largest economy on Oct. 5, the International Monetary Fund (IMF) revised upwards its forecast of 9.1 percent contraction to 5.8 percent decrease this year, praising the Brazilian government's "swift and substantial" response to the economic recession prompted by the COVID-19 pandemic.

The IMF also warned the country still faces "exceptionally high" risks.

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