The market has again revised up its inflation projections for this year and for the longer term, the Central Bank’s Focus Weekly survey showed on Wednesday.
Economists now expect the HICP to rise by 5.90% in 2023, against a rate of 5.89% estimated the previous week. This was the eleventh consecutive increase in Brazil’s high price forecasts this year.
HICP advance forecasts for 2024 remained unchanged at 4.02% in this Monday’s Focus, but longer-horizon accounts rose again after recent lobbying by President Luiz Inácio Lula da Silva for an increase in the HICP. official inflation target to be pursued by the Central Bank, which may raise concerns that expectations are being discouraged.
Analysts consulted now forecast that inflation will be at 3.80% in 2025, against a rate of 3.78% estimated last week and 3.50% expected four weeks ago. For 2026, the expectation has changed to a 3.75% advance for the HICP, up from 3.70% in the previous survey and 3.50% four weeks ago.
The center of the official target for inflation in 2023 is 3.25% and, for 2024 and 2025, it is 3.00%, again with a margin of tolerance of plus or minus 1.5 percentage points.
As for the base interest rate, analysts polled by the BC maintain the prospect that the Selic will close this year at 12.75% and next at 10.00%.
For Gross Domestic Product (GDP), this year’s growth estimate improved slightly for the second consecutive week, to 0.84%, from 0.80% the previous week. For 2024 it remains at 1.50% for the ninth consecutive week.
See below for key market projections for the Brazilian economy, according to the BC’s weekly survey of nearly 100 financial institutions:
Expectations for 2023 2023
market 2024
2024
Median 1 is today 1 today
week week
HICP (%) 5.89 5.90 4.02 4.02
GDP (%) 0.80 0.84 1.50 1.50
Dollar (late 5.25 5.25 5.29 5.30
period-BRL)
Selic (end 12.75 12.75 10.00 10.00
period-% yy)
Administered prices 9.01 9.04 4.39 4.43
(%)
Current account ($ -50.00 -50.0 -50.25 -50.25
bi)
Trade balance 57.85 57.35 56.75 54.50
(Billion US Dollars)
IDP (Billion US Dollars) 80.00 80.00 80.00 80.00
Net debt 61.50 61.23 64.00 64.00
public (%/GDP)
Source: Terra
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