2016 Comes with Worries Faster Inflation – Deeper Recession for Brazil

Brazil analysts forecast faster inflation and a deeper contraction next year, putting them at odds with the country’s top economic officials.

Brazil’s inflation will accelerate 5.50 percent in 2016 compared to last week’s estimate of 5.44 percent, according to the Aug. 21 central bank survey of about 100 analysts. They also forecast the economy will shrink 0.24 percent in 2016, down from a 0.15 percent contraction last week.

It was the third straight week economists increased their consumer price forecast and cut their GDP estimate for next year.

Brazil’s policy makers have raised taxes, cut spending and lifted the key rate to the highest level in nine years as they pledge to re-balance fiscal accounts and slow inflation to the 4.5 percent target by the end of next year. Analysts’ growth outlook are also at odds with central bank President Alexandre Tombini and Finance Minister Joaquim Levy’s assessment that Brazil’s economy will expand next year as exports grow.

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Brazil’s inflation in the 12 months through mid-August reached 9.57 percent. Consumer prices are being fanned in part by a weaker real, which has dropped 24 percent against the US dollar this year.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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