Cenários para as Taxas de Juros e Inflação para 2006-2007: Qual Deveria ser a Meta de Inflação de 2008?

In June 2006 the National Monetary Council is going to define the inflation targetto 2008. That is why it is important to try to preview what the inflation behaviorcould be in 2006 and 2007. The results suggest that it will not be easy to accomplishstrictly the inflation target (4.5%) in 2007 considering a depreciation scenario of thereal compared to the dollar (moderate or higher) at the same time that the interestrates continue to decrease. Therefore it is suggested that the National MonetaryCouncil defines the inflation target for 2008 again in 4.5% in its June 2006 meetingkeeping the target of 2007 also to 2008. Furthermore it is clear that to make itpossible to combine persistent lower inflation rates with higher economic growthrates than the mean of the last 25 years, it is necessary to increase the potential outputgrowth rate.