June 8, 2020 / 1:07 PM / a month ago

Brazil economic outlook dims again, GDP this year now seen falling 6.5%: survey

BRASILIA (Reuters) - The outlook for Brazil’s economy deteriorated for a 17th week in a row, with Latin America’s largest economy now expected to shrink by 6.5% this year, a central bank survey of economists showed on Monday.

That is slightly weaker than the -6.3% median forecast in a recent Reuters poll, and closer to recent revised estimates from a clutch of global banks including JP Morgan, UBS, HSBC and Goldman Sachs, for a contraction of 7% or more.

It is down from -6.25% the previous week and now almost two full percentage points below the government’s official forecast of -4.7%, which itself would still be the biggest annual decline in economic output since records began in 1900.

The weekly ‘FOCUS’ survey on Monday also showed 2020 inflation expectations declining for a 13th consecutive week, albeit it slightly, to 1.53% from 1.55%, another historic low and well below the central bank’s official goal of 4.0%.

Among the survey’s other findings, economists significantly revised their current account deficit and foreign direct investment estimates for this year.

They now expected a current account deficit of $20.5 billion, compared with a $28.1 billion deficit last week and a $35.9 billion shortfall a month ago. The average FDI inflow forecast was reduced to $60 billion from $64 billion a week ago, and over $70 billion a month ago.

Reporting by Jamie McGeever; Editing by Steve Orlofsky

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