BRAZIL ECONOMY FORECAST October 2009

According to the latest Brazil economy forecast issued by the International Monetary Fund (IMF) in October 2009, the Brazilian real Gross Domestic Product (GDP) will shrink in 2009 at an average rate of less than 1%, but rebound in 2010 registering a growth rate in excess of 3%.

More specifically, the October IMF forecast predicts that the Brazilian real GDP, after having grown in 2007 and 2008 by 5.7% and 5.1%, respectively, will decrease in 2009 at an average rate of 0.7%.

In 2010 though, Brazil's economy is expected to return to expansion mode, registering a real GDP growth rate of 3.5%. Real GDP is expected to continue growing at this rate until 2012. The graph below portrays historical and forecast growth rates for the Brazil economy.

Brazil Economy Forecast October 2009

Source: IMF

IMF's Brazil economy forecast anticipates that inflation, which in 2008 averaged 5.7%, will be decreasing in 2009 and 2010 to 4.8% and 4.1%, respectively. As the graph below indicates, the inflation rate will then rise to 4.5% in 2011 and stabilize at that level throughout 2013.

Brazil Inflation Forecast October 2009

Source: IMF

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