Sténio Ribeiro
Reporter - Agência Brasil

Brasília - Volatility on foreign markets has led to lower expectations for foreign direct investments in the productive sector, to the point where the market analysts surveyed last Friday (23) for the Central Bank's (BC) Focus Bulletin reduced their forecast for this year's inflows from US$ 15.5 billion to US$ 15.35 billion.

On the other hand, they raised their projections for the year-end exchange rate of the US dollar from R$ 2.24, in last week's survey, to R$ 2.25. They continue to predict that the US dollar will be worth R$ 2.35 at the end of 2007.

All the other indicators of the domestic economy remain unchanged, expect for inflation, for which the analysts lowered their forecast for retail prices and raised it for wholesale prices. Nevertheless, according to today's (26) edition of the Focus Bulletin, the Broad Consumer Price Index (IPCA) will definitely end the year below the official target of 4.5%.

According to the survey, the trade surplus (exports minus imports) will amount to around US$ 40 billion this year (US$ 35.26 billion in 2007), maintaining the forecast for this year's surplus in the current account, which includes all foreign commercial and financial transactions, at US$ 9 billion (US$ 4 billion in 2007).

There was a slight improvement, from 4.25% to 4.26%, in predicted industrial growth, without affecting the 3.6% forecast for this year's increase in the Gross Domestic Product (GDP), which represents the total wealth produced in the country. The forecast for next year's GDP also remains unchanged, at 3.70%.

Translation: David Silberstein