Brasília, February 2, 2004 (Agência Brasil - ABr) - The Focus bulletin, released today by the Central Bank (BC) and indicative of market's expectations in terms of major economic indicators, shows a rise in all inflation predictions for 2004. The Broad Consumer Price Index (IPCA), which serves as an official parameter, rose from 5.99%, last week, to 6.01%. The market's forecast for next year remained at 5%.

Over the course of the week, other inflation indexes were also altered in an upward direction : the General Price Index - Internal Supply (IGP-DI), from 6.22% to 6.30%; the General Price Index - Market (IGP-M), from 6.26% to 6.58%, and the Fipe Consumer Price Index (IPC-Fipe), from 5.87% to 5.89%. The market continued to project January's IPCA at 0.70%, but the inflation estimate for February was raised from 0.60% to 0.70%.

The parameters surveyed by the Central Bank with the country's chief financial analysts show the market to be more optimistic about growth in the Gross Domestic Product (GDP) in 2004. The forecast rose from 3.60% last week to 3.66%. The projected trade balance surplus was also raised, from US$ 20.1 billion to US$ 20.4 billion, while the current account deficit is expected to add up to US$ 2.50 billion, as against US$ 2.55 billion last week.

The analysts are less optimistic, however, with regard to prospects for a reduction in the prime interest rate, after the Monetary Policy Committee (Copom) interrupted a string of seven straight months of reductions and decided to maintain the annual Selic rate at 16.50%. Whereas estimates made in January projected a 15.50% Selic for February, the estimates now point to 16.33%. (DAS)