MercoPress. South Atlantic News Agency

Inflation creeping in Brazil.

Market analysts in Brazil increased the 2004 inflation estimate to 7,13% compared to 7,08% only a week ago according to the latest release from the Bank. However, the hundred main companies of the country said the price increase estimate for 2005 remains at 5,50%.

President Lula da Silva administration has a target inflation for this year of 5,5% (with a 2,5% margin) and 4,5% in 2005.

Market analysts forecast the Brazilian economy this year will expand 3,65% and 3,5% in 2005. But regarding the basic interest rate, Selic, currently at 16% analysts are more cautious, believing it will end the year at 15,5% and remain unchanged in 2005, at 14%.

The current account surplus this year is forecasted to reach 6 billion US dollars, with an additional 2 billion in 2005. Trade surplus in 2004 should reach a record 29 billion US dollars and 25 billion US dollars in 2005.

Foreign direct investment is estimated in 10 billion US dollars this year and 12,9 billion in 2005, with the US dollar in money markets exchanging at 3,10 Reales at the end of 2004 and 3,25 Reales in December 2005.

The jobs situation indicates that for the second month running employment in Sao Paulo, the heart of Brazilian industry, increased with the creation of 107,000 new posts.

This means unemployment dropped from 19,7% last May to 19,1% in June, with 1,9 million people still looking for jobs.