Brazil is set to show a return to growth, the Central Bank indicated Monday, raising hopes that Latin America’s biggest economy could be inching out of a two-year recession.Add your comment!
Brazil's central bank expects annual inflation to ease below the government's 4.5% target in 2017 after years of hovering well above that goal, leaving the door open for cutting some of the world's highest interest rates as early as October. The bank also held its estimate for an economic contraction of 3.1% in 2016, but it expects the economy to grow 1.3% in 2017.
Brazil's central bank kept interest rates at a decade high for the ninth straight time on Wednesday, but did not discard a cut rate later this year if stubbornly high inflation subsides. In a unanimous vote, the bank's monetary policy committee, Copom, kept its benchmark Selic rate at 14.25%, its highest since July 2006.
Things are looking up for the Brazilian economy - but it won't be due to the Olympic games starting this week, according to a UBS report published last Friday.
Unemployment in Brazil was 9% during the September-November rolling quarter, unchanged from the August-October period, the Brazilian Institute for Geography and Statistics reported.
Recession-hit Brazil's central bank in a divided vote left the key interest rate untouched on Wednesday despite rising inflation, opting against an increase that could put a further brake on the world's seventh-biggest economy.
Analysts expect Brazil's economy to contract by 3.62% this year, with inflation hitting 10.61%, the Central Bank said Monday. GDP and inflation estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy.
Brazil's central bank chief, Alexandre Tombini, told lawmakers he opposes using the country's $370 billion foreign reserves at this moment as they serve as an insurance policy for Latin America's largest economy.
Brazil is well prepared to cope with any market volatility resulting from a U.S. interest rate rise, Finance Minister Joaquim Levy said on Monday. The minister told a meeting in Madrid that Brazil's banks were well capitalized and the country has large foreign exchange reserves.
Analysts expect Brazil's economy to contract by 2.26% this year, reflecting greater pessimism in the wake of the release of figures last week showing that the country is in a recession, the Central Bank said Monday.