BRASILIA, Sept. 8 (Xinhua) -- Brazil's financial market raised its forecast of a drop in gross domestic product (GDP) in 2020 from 5.28 percent to 5.31 percent, marking the first setback in the forecast after eight consecutive weeks of improving expectations, the Central Bank of Brazil said on Tuesday.

According to the bank's weekly survey of analysts at leading financial institutions in the South American country, the economic growth forecast for 2021 remained unchanged at 3.5 percent.

Last week, the Brazilian Institute of Geography and Statistics (IBGE) reported a 9.7 percent contraction in GDP in the second quarter of the year, following a 2.5 percent contraction in the first quarter, signalling Latin America's largest economy has officially entered into a recession.

As for inflation, market analysts raised their forecast inflation for 2020 from 1.77 to 1.78 percent, and kept it at 3 percent for next year.

Expected inflation falls within the government's target rate of 4 percent in 2020 and 3.75 percent in 2021, with a 1.5 percent margin of error up or down.

The projected benchmark interest rate remained unchanged at 2 percent annually by the end of the year and 2.88 percent by the end of 2021.

Regarding the trade balance (balance between exports and imports), analysts projected a surplus of 55 billion U.S. dollars in 2020 and of 53.35 billion U.S. dollars in 2021.

Foreign direct investment in Brazil is forecast to reach 55 billion U.S. dollars in 2020 and 65.48 billion U.S. dollars in 2021. Enditem

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