LatinNews Daily - 19 August 2021

* Economists and financial analysts in Brazil have warned the central bank (BCB) that the country has now entered “election mode”, which represents a risk for public accounts and the country’s fiscal credibility. Brazil’s next presidential elections will take place in October 2022, but “everyone is making the point that the election has already started”, an analyst was reported as saying by national daily O Estado de São Paulo. In a closed-door meeting with BCB directors, analysts reportedly expressed concern with the government’s commitment to respecting the constitutionally-mandated spending cap, particularly given the new social programme Auxílio Brasil, and noted that uncertainty is already dimming economic forecasts for 2022, with GDP growth expected to be muted while inflation and interest rates remain high. The BCB’s latest Focus bulletin, a weekly survey of market analysts, put 2022 GDP forecasts at 2.04% and inflation projections at 3.9%, while inflation is expected to close this year at 7.05% and the forecast for 2021 GDP growth stands at 5.28%. 

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