The 2025 budget presents more optimistic projections than the market for inflation, GDP and interest rates

The federal government expects higher growth, with inflation in line with the target from 2026 and a lower Selic rate

BRASILIA-THE Budget Bill 2025 (OLP) sent by the Federal Government to Congress This Friday, the 30th, there are more optimistic projections than those of the financial market regarding the main indicators of the economy, such as GDP, inflation, the exchange rate and interest rates.

As for GDP growth, for example, the government estimates a 2.6% increase for next year, while the latest data from Focus Bulletin, which collects information from financial institutions, predicts growth of just 1.86%, almost one percentage point less.

For the following years, from 2026 to 2028, the market predicts that the country will grow by 2% per year, while the Lula government predicts an increase of 2.6%.

In recent years, however, the market has misreported its numbers and made corrections throughout the year that have come close to matching the federal government’s data.

As for the IPCA, the government estimates a 3.3% increase next year, to reach the 3% target from 2026. In this case, neither Focus nor the Central Bank have such optimistic numbers. The market expects inflation in 2025 to be 3.93%, with an increase of 3.5% in 2026 and 3.5% in the following years.

The BC, in its baseline scenario, which follows the Focus interest estimates, expects inflation to be 3.4% in the first quarter of 2026. In the alternative scenario, with the Selic stable at 10.5%, the IPCA would remain at 3.2% in the same period.

This week, President Luiz Inácio Lula da Silva has appointed economist Gabriel Galípolo as president of the Central Bankstarting in January 2025. Lula has been a strong critic of the interest-oriented policy of Roberto Cmpos Neto’s administration. To reach the 3% target, however, the Monetary Policy Committee (Copom) would have to raise the Selic rate to an even higher level.

For the Selic rate, the government estimates an average annual rate of 9.61% for next year, with a progressive reduction, year after year, to 6.9% in 2028. Focus, which publishes end-of-period data, predicts that the Selic rate will reach 10% in December next year, to reach 9% in 2027 and 2028.

Source: Terra

Rose

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