Economists cut Brazil growth forecast

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Monday, February 18, 2019

Brazilian economists cut their GDP growth estimate for this year after the release of figures showing disappointing growth in 2018.

They now expect GDP to expand 2.48% in 2019, according to a weekly central bank survey with 100 economists, compared to 2.50% in the prior survey.

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Last week, the monetary authority released its economic activity index, a GDP proxy known as IBC-Br, showing the economy grew 1.15% last year. In 2017, the economy expanded 1%.

Last year's performance turned out to be a major disappointment when considering the high hopes for a strong recovery at the beginning of the year.

At the start of 2018, local economists were forecasting GDP growth of around 3% but the predictions then began to gradually decrease due strong international and local market volatility, a 10-day truckers strike in May and the country's turbulent presidential election.

Meanwhile, the economists maintained their year-end inflation forecast at 3.87%, which is below the central bank target of 4.25%. They also see the bank keeping the Selic benchmark interest rate at the current level of 6.5%, which is the lowest level ever, during all of 2019.