RIO DE JANEIRO, Dec. 21 (Xinhua) -- Brazil's annual basic interest rate Selic will reach 10.75 percent by the end of 2010, according to the Focus market survey released Monday by the country's Central Bank.

    The projection is slightly higher than last week, when economists predicted a rate of 10.63 percent. The Selic rate is currently at 8.75 percent, its lowest ever registered, and will not undergo any further changes in 2009.

    According to the survey, Brazil's GDP will shrink 0.23 percent in 2009, slightly down from 0.26 percent in last week's projection. In 2010, the Brazilian economy is expected to register a 5 percent growth, lower than last week's projection of 5.03 percent.

    The industrial production in 2009 will decrease 7.62 percent, compared with last week's projection of 7.65 percent. In 2010, however, Brazil's industry sector is expected to fully recover with an expansion of 7.11 percent, the survey said.

    The country's inflation rate is expected to reach 4.29 percent this year. The projection for the 2010 inflation rate remained at 4.5 percent.

    The Brazilian government set for both this year and next year an inflation target of 4.5 percent, with a tolerance of two percentage points. That means the inflation rate cannot surpass 6.5 percent.

    In the first 11 months of the year, Brazil accumulated an inflation rate of 3.93 percent.

    The projections for the foreign direct investments were maintained at 25 billion U.S. dollars for 2009 and 35 billion dollars for next year, according to the survey. In 2008, Brazil registered a record 45 billion dollars in foreign direct investments.

    The current account is expected to register in 2009 a deficit of 18.2 billion dollars, slightly up from last week's projection of 18 billion dollars. In 2010, the current account is to have an even bigger deficit of 40.35 billion dollars.

    The Brazilian Real-U.S. dollar exchange rate is expected to end at 1.74 reais against the dollar in 2009, compared with 1.73 reais against the dollar in last week's projection.

    The projection for the end of 2010 was maintained at 1.75 reais against the dollar. The current exchange rate is 1.78 reais against the dollar.

    Additionally, Brazil is expected to register a trade surplus of25 billion dollars this year and 11.3 billion dollars in 2010, the survey said.

Special Report:  Global Financial Crisis