Rio, March 12, 2004 (Agência Brasil - ABr) - The Central Bank's austere administration of monetary policy, together with the performance of the exchange rate, led the Institute of Applied Economic Research (Ipea) to revise downward its inflation forecast for this year, in terms of the Broad Consumer Price Index (IPCA). March's Quarterly Conjuncture Bulletin, published yesterday (11), presents a forecast of 5.7%, as against December's estimate of 6.1%.

In the previous Bulletin, it was predicted that the average exchange rate for the year would be R$ 3.11. The Ipea is currently working with an average of R$ 2.97. For Paulo Mansur Levy, an economist who coordinates Ipea's Conjunctural Accompaniment Group, "this in itself helps to relieve the pressure on inflation and, consequently, reduce the rate for the year."

The economist recalled that the trade balance surplus projected by the Ipea is growing significantly, following last year's levels, which exceeded expectations. He observed that the predicted deficit in current transactions, in line with the improvement in the trade balance, was reduced from US$ 3.9 billion to US$ 1.4 billion. (DAS)