Brazil Central Bank’s latest weekly survey of how 100
financial institutions and consultancy firms see the near future has found more
optimism regarding growth.The market has revised its estimate for year-end industrial sector growth upwards from 6.09% last week, to 6.28% this week. At the same time, estimates for GDP growth also rose, from 3.97% to 4%.
On the other hand, inflation estimates also rose. The market sees rising domestic demand pushing prices upward. Thus, estimates for the IPCA (Broad Consumer Price Index) went from 7.19% to 7.25%.
As for trade, the market has increased its year-end estimate for the surplus, from US$30.1 billion to US$30.5 billion. And is forecasting a current account surplus of US$7.4 billion this year, and US$3 billion in 2005.
Market estimates for the debt/GDP ratio have gone from 57% a month ago, to 56.75% last week, to 56;70% this week. The estimate for 2005 is 55.1%.
Finally, with regard to the dollar, the market estimates it will be R$3.10 at the end of this year and R$3.20 at the end of 2005.
Brazil’s federal government debt reached US$ 304.3 billion (946.7 billion reais) in May, the equivalent of 56.8% of GDP. In April the ratio was 56.5%.
According to the head of the Central Bank Economic Department, Altamir Lopes, a spike in the exchange rate, which rose 6.26% in May, caused the size of the debt to rise US$ 1.3 billion (4.2 billion reais) because of money-market debt indexed to the dollar and another US$ 3.3 billion (10.4 billion reais) because of debt service charges, also in dollars.
But Lopes points out that last December the debt/GDP ratio was 58.7%, which shows that there has actually been “a significant reduction of 1.93 percentage points,” a reflection of responsible fiscal policy, he said.
Another reflection of good government policy was the primary surplus in May, says Lopes, which was the best ever for May at US$ 1.8 billion (5.8 billion reais). That brings the surplus to US$ 12.3 billion (38.2 billion reis), the equivalent of 5.87% of GDP, for the January to May period.
Lopes also reports that Brazil’s total government debt, which includes states and municipalities, reached US$ 409 billion (1.273 trillion reais), or 76.4% of GDP. In April it was 77.4% of GDP
Agência Brasil