Brazilian economy cools down with global turbulence

For the fifth consecutive week, Brazilian financial analysts reduced their estimates for the Brazilian economic growth this year.

Local market sentiment poll – Focus Report

According to the Focus report, released by the Brazilian Central Bank the forecast 2011 GDP (Gross Domestic Product) fell from 3.29% to 3.20%.

The same happened in the inflation projection this year, which stood at 6.50%; the government’s target ceiling. Currently, the Selic rate is 11.50% per year. Exchange rate forecasts were not altered, thus R $ 1.75 per dollar.

Foreign direct investment expectations for 2011 remained stable at U.S. $ 60 billion, while for 2012 the inflow of investments in Brazil went up from 52 to $ 53 billion.

Industrial production index: not good

Global turbulence is halting the Brazilian industry production more then expected.  Analysts are disappointed with industrial production in September. The index fell a stronger-than-expected 2.0% and weakness was spread across sectors.  September’s industrial result suggests hardly any GDP growth at all in the third quarter and a 3% forecast is now considered optimistic by Itau Unibanco research.

About Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists Group. She is a fellow researcher of the Centre Roland Mousnier at the Sorbonne University and a member of the Brazilian Investment Analysts Association (APIMEC-Rio), where she served as Corporate Relations Director and later, on the board. Hildete advises companies and investment agencies in international business development.
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