Brasília, September 8, 2003 (Agência Brasil - ABr) - The expectations of the country's foremost financial institutions over the prospects for growth in the Gross Domestic Product (GDP) this year are less optimistic. The Focus bulletin, a survey conducted by the Central Bank (BC) shows that the forecast fell from 1.20% last week to 1.03%, today.
This pronounced reduction reflects last week's report by the Institute of Applied Economic Research (Ipea), which projected 0.5% growth in 2003. The Ministry of Planning itself is working with growth estimates of around 1%.
But while estimates of the GDP slide downhill, other indicators demonstrate a positive economic outlook. The control of inflation, for example, which has been on the decline for 14 weeks, according to the median of estimates for the Broad Consumer Price Index (IPCA), which serves as a parameter for adjusting government accounts.
Market estimates, which in the beginning of August indicated a cumulative IPCA of 9.93% for the year, dropped to 9.57% last week and 9.55% in the current survey. The projections are getting closer, therefore, to the federal government's 8.5% target for inflation. The market expects inflation to total 0.34% in August and 0.57% in September.
There was, however, a slight increase in expectations for inflation in administered prices (electricity, fuels, and telephone services), from 13% to 13.28% over the last week. Forecasts for the other indexes of inflation compiled by the Brazilian Institute of Geography and Statistics (IBGE) and the Research Institute Foundation (Fipe) of the University of São Paulo remain unchanged and below the 8.5% target for inflation, with the exception of the General Market Price Index (IGP-M), for which the projection gave an upward lurch from 8.40% last week to 8.48% in the current survey.
The financial institutions are more confident about the increase in the trade balance surplus, which they predict will end the year at US$ 19.10 billion. Greater, therefore, than the previous prediction of US$ 18.40 billion. Expectations are also less pessimistic about the entry of foreign investments in 2003: Forecasts for direct investments rose from US$ 8.30 billion last week to US$ 8.50 billion in the latest survey.
As a result, projections for the current account deficit in 2003 were reduced from US$ 2 billion to US$ 1.5 billion. On the other hand, the expected ratio of net public sector debt to the GDP rose from 55% to 55.15%. According to the same projections, the dollar should close the year with an exchange value of R$ 3.15. (DAS)
