The market expects zero GDP growth in Q3. The COPOM minutes should show that the focus remains on the external front. Inflation to drop slightly in November from 7.0%y/y in October.
• GDP to decelerate significantly; negative growth? (Dec. 6th).
Both private consumption and investments slowed down and should drive GDP growth close to zero. The weakness of recent activity data suggests negative growth is also a possibility. The market expects activity to show a mild rebound in Q4 due to tax cuts. All in all, GDP is forecasted to grow 3.2% in 2011, but some put it at 2.8%.
• COPOM to focus on global risks and, secondarily, on domestic moderation (Dec. 8th).
On Thursday the CB will release the minutes of last week’s monetary policy meeting in which the SELIC rate was cut to 11.0%. The market expects the minutes to support at least two additional 50bps cuts of the benchmark rate in the first quarter of 2012.
• Declining, but still high inflation (Dec. 9th).
The market forecasts inflation to drop to close to 6.5%y/y in November from 7.0%y/y in October. Although the moderation of the economy will help inflation to continue trending down in 2012, one should not expect it to converge to the 4.5% target. It should stay close to 6.0% at the end of 2012.