Analysts interviewed by the Central Bank maintained their inflation expectations for this year and next year, interrupting a recent sequence of increases, even if the forecasts for longer-term price advances have returned to an upward trend.
The weekly Focus survey, released on Monday, estimates that the HICP will rise by 5.90% in 2023 and 4.02% in 2024, unchanged from the previous survey.
This year’s projection broke a streak of 11 consecutive hikes, while next year’s bill was flat for the second straight week, following a five-day hike.
The center of the official inflation target 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.
On the other hand, economists raised their inflation estimate for 2026 for the third time in a row, to 3.77%, from 3.75% the previous week. This should fuel investors’ fears that expectations are being dashed after President Luiz Inácio Lula da Silva’s recent criticism of the central bank’s conduct on monetary policy and inflation targets.
The market maintained its outlook that the Selic will close this year at 12.75% and 10.00% next year, according to Focus, but raised its 2026-end interest rate projection by 0.05 percentage point, all the while ‘8.75%. The rate is currently at 13.75%.
For Gross Domestic Product (GDP), this year’s growth estimate improved marginally for the third week in a row, to 0.85%, from 0.84% the previous week. For 2024 it remains at 1.50% for the tenth consecutive week. On Thursday, data from the IBGE showed that GDP grew 2.9% in 2022, down 0.2% in the recent quarter compared to the immediately preceding three months.
Source: Terra
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