Market lowers GDP growth forecast to 1.68%

The coronavirus pandemic continues to worsen the Brazilian economic situation. This is because the financial market reduced its forecast for the fifth time GDP growth of Brazil in 2020. According to analysts, the country's Gross Domestic Product will only increase by 1.68% this year. Before, the estimate was that it would grow 1,99%.

This change was disclosed in the “Focus” report, a market bulletin released by the Central Bank this Monday (16). To prepare it, it is necessary to survey data from more than 100 financial institutions. Keep reading for more information on financial market estimates and also more effects of the coronavirus pandemic around the world.

The coronavirus not only caused the change in the forecast of Brazilian GDP growth

According to the report, the financial market also estimates a new cut in the Brazilian basic interest rate. At the moment, the Selic is set at 4.25%, an all-time low. Analysts predict that it will be reduced to 4% per year. It is important to mention that the Monetary Policy Committee (Copom) will meet tomorrow (17) and on Wednesday (18) to deliberate on this issue. Its decision will be announced on Wednesday at 6 pm.

As for the country's inflation in 2020, market analysts also reduced their estimate. According to them, the percentage will not be more than 3.20%, but 3.10%. Therefore, the forecast will be below the central target set for this year (4%). It is worth mentioning that inflation can vary both for 2.5% and for 5.5%.

It is also important to state that the coronavirus is not only affecting the Brazilian economy. Other countries are also taking steps to remedy the impacts of the pandemic. The US central bank, for example, has already cut the country's interest rate by one percentage point. Thus, now the percentage charged in the US varies between 0% and 0.25%.

Conclusion

After having said about this subject, we at Notícia Informe hope that you have clarified your doubts about the forecast of the market in relation to the GDP growth. Therefore, let us know in the comments what you thought of the analysts' estimate and if you expected that the coronavirus would impact the country's economy in this way.

Anyway, always follow our website. That's because we will bring the main information about the effects of the coronavirus in Brazil and other countries. So if you want to know about the GDP growth and about other relevant information, keep following our next publications.

Source: G1