Brazil Economists Forecast More Rate Cuts
(Bloomberg) -- Analysts cut their estimates for Brazil’s benchmark interest rate for a second consecutive week as coronavirus wreaks havoc in Latin America’s largest economy.
The benchmark Selic will fall to 3.25% at the end of this year before rising to 4.75% by December 2021, down from previous forecasts of 3.50% and 5%, respectively, according to a central bank economist survey published on Monday. Analysts now expect the economy to shrink 1.18% this year, compared with an estimate for a 0.48% contraction previously.
Brazil government officials have come under fire for failing to mount a powerful policy response to the pandemic. In recent weeks, stores and factories have been shuttered, airlines have grounded nearly all flights and dozens of citizens have died. The lower house of Congress on Friday approved a so-called “war budget” which circumvents fiscal laws to finance anti-virus measures. The measure needs to be approved in the Senate now.
Read more: Brazil House Readies Virus Budget as Bolsonaro Response Lags
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