BRASILIA, March 2 (Reuters) - The 2020 outlook for Brazil’s economic growth, inflation and exchange rate slipped to new lows, a central bank survey of economists showed on Monday, suggesting Latin America’s largest economy will struggle to gain significant traction this year.
Inflation expectations have now declined for nine weeks in a row, to even further below the central bank’s 4.00% goal, while average growth forecasts are edging closer to the politically-sensitive 2.00% threshold.
The central bank’s latest weekly ‘FOCUS’ survey of around 100 financial institutions comes as the real has slumped to a series of all-time lows against the dollar. Yet its 10% depreciation so far this year is still not feeding through to inflation expectations.
According to the latest FOCUS survey, inflation this year will be 3.19%, gross domestic product growth will be 2.17%, and the real will end the year at 4.20 per dollar. Four weeks ago, these forecasts stood at 3.40%, 2.30% and 4.10/dollar, respectively.
The global economic impact of the coronavirus outbreak has led many economists to slash their 2020 Brazilian GDP growth forecasts, some below 2%. The government is expected to revise its forecast of 2.40% soon.
The FOCUS survey on Monday showed one notable change to the 2021 outlook. The central bank’s benchmark Selic interest rate, currently at a record low 4.25%, is expected to end next year at 5.75%, compared with 6.00% forecast the week before. (Reporting by Jamie McGeever Editing by Chizu Nomiyama)