Market is estimated that GDP do passe 3,27% for 3,24% this year

The projections are part of research done every week by the Central Bank on key economic indicators.
01/08/2016 10h10 - Updated 1/08/2016 10h10
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Financial institutions consulted by the Central Bank (BC) They expect a slightly lower shrinking economy 2016. The estimate for the fall of the Gross Domestic Product (START), sum of all goods and services produced in the country, it went from 3,27% for 3,24%. For 2017, growth projection follows in 1,1% for two consecutive weeks. The projections are part of research done every week by the Central Bank on key economic indicators. It is published on Mondays.

The projection of the financial institutions for inflation, measured by the National Index of Consumer Prices Broad (HICP), It was maintained at 7,21%. For 2017, the estimate fell 5,29% for 5,20%.

The estimates are far inflation target center of 4,5%. For this year, the projection also exceeds the upper limit of the target: 6,5%. The target ceiling in 2017 It is 6%.

BC is the function to make the inflation is within the target. One of the instruments used to influence economic activity and inflation is the basic interest rate, the Selic.

Selic rate

When the Monetary Policy Committee (Copom) the Central Bank increased the Selic, the goal is to contain the strong demand, and that creates reflections in prices, because higher interest rates more expensive credit and stimulate savings. Already when the Copom reduced the basic interest, the trend is that credit becomes cheaper, to encourage the production and consumption, but the measure relieves the control over inflation.

The central bank has to find balance when making decisions on the basic interest rate, so as to cause the inflation is within the target set by the National Monetary Council. currently, the Selic is 14,25% per year.

The expectation of financial institutions to the rate at the end of 2016 rose from 13,25% for 13,50% per year. For the purpose of 2017, the expectation for the base rate remains 11% per year, for five consecutive weeks.

The projection for the dollar was changed from R $ 3,34 to R $ 3,30 the end of 2016, and maintained at R $ 3,50 in order to 2017.

Source: Agency Brazil

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