Itaú BBA - New Central Bank governor assumes amidst an uncertain outlook

Brazil Scenario Review

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New Central Bank governor assumes amidst an uncertain outlook

March 15, 2019

The communication from the Monetary Policy Committee’s (Copom), and the news flow on pension reform will play a key role

Please open the attached pdf to read the full report and forecasts.
 

• We maintained our GDP growth forecasts at 2.0% in 2019 and 2.7% in 2020.

• We revised our estimate for the primary deficit in 2019 to 1.4% of GDP, from 1.3%, but maintained our 0.8% deficit estimate for 2020. This scenario strictly depends on the approval of pension reform.

• Our year-end forecasts for the exchange rate remained unchanged at BRL 3.80 per USD in 2019 and BRL 3.90 in 2020.

• We expect the IPCA to rise 3.6% in both 2019 and 2020.

• The Selic rate is expected to remain at 6.5% p.a. in upcoming policy meetings. However, the communication from the Monetary Policy Committee’s (Copom), now under new leadership, and the news flow on pension reform will play a key role in determining the future trajectory for interest rates.


 

Please open the attached pdf to read the full report and forecasts.



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