Brazil’s Real Rates May Drop to 2% by 2014, Barbosa Tells Valor

Brazil’s benchmark interest rate adjusted for inflation may drop to 2 percent from about 6 percent currently should the next government deliver a budget surplus before interest payments of 3.3 percent of gross domestic product, Valor Economico reported, citing estimates by Economic Policy Secretary Nelson Barbosa.

Barbosa forecast Brazil’s net debt may drop to 27.8 percent of gross domestic product in 2014 from 39.6 percent this year if Brazil’s economy averages 5.5 percent growth over the next four years and the government meets its primary surplus target of 3.3 percent of GDP, Sao Paulo-based newspaper Valor Economico said today.