Brasília - Financial market analysts and consultants are now convinced that this year's inflation will close out within the government forecast's margin of error. The government inflation target, based on the Broad Consumer Price Index (IPCA), is 5.5%, give or take 2.5 percentage points. For the last three months the weekly market survey by the Central Bank, known as Focus, has seen market estimates for inflation slowly rise. The latest survey found the market estimate at 7.15%, up slightly from 7.13% the week before.

Market estimates for July inflation are for the IPCA to rise between 0.92% and 0.95%, which is much higher than June, when it rose 0.71%. However, the optimism is based on a future slowdown in inflation. Market estimates for August inflation are now at 0.58%.

Agência Brasil
Reporter: Stenio Ribeiro
Translator: Allen Bennett
08/03/2004