Macro Brazil: More of the same
The latest BCB’s Focus report is showing that the market is reaching a consensus for inflation, GDP and interest rates figures.
BTG’s chief economist, Eduardo Loyo, summarizes it: “The Focus report for the week ending September 16 again brought some short-term relief to inflation expectations, with the market cutting its forecast for YE2016 IPCA inflation to 7.34% y/y (vs. 7.36% y/y last week), whilst 2017 consensus was unchanged at 5.12% y/y. Elsewhere, the market is now working with slightly better GDP numbers for 2016 and 2017, with consensus improving to a decline of ‘only’ -3.15% y/y this year (vs. -3.18% y/y last week) and growth of 1.36% y/y next year (vs. 1.30% y/y). Turning to monetary policy, market consensus for the Selic interest rate remained stuck at 13.75% p.a. for YE16 and at 11% p.a. for YE17. More of the same”.
