Forecasts for Brazil: 2.5% Growth, 5% Inflation, Dollar at 2.25 Reais

The Brazilian financial market, in its first survey this year, confirmed most of the forecasts made last week concerning the Brazilian economy. The Focus bulletin, released every Monday by the Central Bank of Brazil, has maintained the inflation rate expected for 2009 at 5%, measured according to the Broad Consumer Price Index (IPCA).

The Consumer Price Index (IPC), however, which is measured by the Economic Research Institute Foundation (Fipe), should decrease to 4.72% this year, as against the 4.77% forecast that had been estimated over the last four weeks.

The dollar should remain equivalent to 2.25 reais (Brazilian currency) in 2009 and the benchmark interest rate (Selic) should end the year at 12%, according to analysts at the country's leading financial institutions, surveyed by the Central Bank.

The economy should grow 2.4% this year, as against a forecast of 2.44% made last Monday. Industrial production should rise 2.7% this year, as against 2.9% forecasted a week ago.

Foreign investment in the country this year should rise from US$ 21.5 billion, forecasted last week, to US$ 23 billion. With regard to the balance of trade, according to analysts, exports should grow by US$ 23 billion in 2009, as against a forecasted increase of US$ 21.5 billion, as estimated last week.

ABr