GDP projection made by Focus changes from a drop of 3.76% to a retraction of 4.11%

The contagion of the new coronavirus is increasing and so is the death toll. Therefore, we could not expect the situation of the economy to be better than before. In fact, the figures released by the Focus Market Report confirm this impression. This survey, released weekly by BC, revealed that the GDP projection of the financial market went from a drop of 3.76% to a retraction of 4.11%.

This change in the estimate of economists is justified by the stoppage of companies and the restriction of the activities of those that continue to operate. With regard to next year, the forecast was maintained. The market expects GDP to increase by 3.20%. Want to know more about the data released by this survey? Then continue reading as we will present your main information.

More data from the survey that pointed to the reduction in the GDP forecast

Regarding the 2020 inflation estimate, the market expects the IPCA to reach 1.76%. If this percentage is compared with the previous week, there will be a reduction of 0.21 percentage points. Thus, the forecast is that inflation will be well below the target floor set for this year. After all, inflation should stay at 4%, and could vary 1.5 percentage points up or down.

With regard to the projection of inflation for 2021, it is expected to be 3.25%. This is a lower percentage than what was predicted last week, when the market had estimated an inflation of 3.30%.

With regard to the basic interest rate, the survey predicts that it will reach 2.50% at the end of this year. This percentage is below the one released last week: 2.75%. It is worth remembering that BC reduced the Selic to 3% last week. In this way, he made a reduction of 0.75 percentage points.

The market forecast for the Selic next year is that it will reach 3.50% by the end of the year. Last week, the expectation was that this percentage would be higher: 3.75%.

Final considerations

That said, we News Report we hope to have clarified the main information regarding the data indicated by the Focus Market Report. Tell us in the comments what you think of the GDP projection. Were you expecting a reduction in the economists' estimate? Finally, keep following our website! We'll let you know about the main news of the day! So stay tuned for our publications!

 

Source: Money Times