Rio, March 17, 2003 (Agência Brasil - ABr) - Initial projections for the performance of the Brazilian economy point to an average annual interest rate of 24.5%, declining to 18.3% in 2004. The index was released on Friday (14) by the Brazilian Institute of Geography and Statistics (IBGE). Inflation, as gauged by the IBGE's Broad Consumer Price Index (IPCA), is estimated to be around 12.6% in 2003, falling to 7.6% in 2004.

The economists also predict a 1.9% growth rate in the Gross Domestic Product (GDP) this year, increasing to 2.9% next year. The average open unemployment rate, as measured by the IBGE, will remain high, varying between 10.7% in 2003 and 10.8% in 2004. Brazil will face difficulties in rolling over its foreign debt in the second half of this year, if the Brazil-risk factor doesn't decline and domestic conditions don't improve, most of all when it comes to the approval of structural reforms, according to the economists.

The outlook is for an US$ 18 billion trade balance surplus over 12 months and a current transactions deficit close to zero. (DAS)