Brazil’s inflation rate to reach 4.27 percent in 2009: survey

Brazil is expected to register an inflation rate of 4.27 percent in 2009, according to the Focus market survey released Tuesday by the country’s Central Bank.

The figure is slightly lower than that of last week, which is 4.29 percent.

For 2010, the latest survey predicts an inflation rate of 4.45 percent, down from 4.5 percent in the last survey.

Both figures are below the inflation target set by the Brazilian government, which is 4.5 percent with a two percentage point tolerance.

Latest estimates for Brazil’s gross domestic product (GDP) remained the same as last week’s, with an expansion of 0.18 percent. Next year, Brazil’s GDP is expected to increase 4.8 percent, which is also the same as last week’s.

The industrial production is expected to fall 7.57 percent in 2009 compared to 2008. In 2010, however, the Brazilian industry sector is expected to recover and expand 6.5 percent.

According to the Focus survey, Brazil’s annual basic interest rate Selic will remain at its current level of 8.75 percent until the end of this year. In 2010, the rate is expected to rise 10.5 percent.

The Brazilian Real-U.S. dollar exchange rate is expected to be at 1.70 reais against a dollar by the end of this year and at 1.75 reais against a dollar by the end of 2010. The exchange rate is currently at 1.74 reais against a dollar.

The foreign direct investments are expected to total 25 billion U.S. dollars in 2009, a sharp decrease from the record-high 45 billion dollars registered in 2008.

Next year, the foreign direct investments are expected to reach 33 billion dollars.

The trade surplus is to reach 26 billion dollars in 2009, according to the Focus survey, adding the surplus will fall to 16.25 billion dollars in 2010.