The financial market has once again raised its inflation forecast for this year. According to the projection of the Focus Bulletin, released today (7), in Brasília, by the Central Bank, the Broad Consumer Price Index (IPCA) – the country’s official inflation – should close 2022 at 5.44%. This is the fourth time that inflation is projected to rise for 2022. A week ago, the market estimate was that inflation would end the year at 5.38%. Four weeks ago the forecast was 5.03%.
For 2023, analysts maintained last week’s expectation in relation to the IPCA. This week’s projection points to an inflation of 3.50%. Two weeks ago, the calculation was 3.40% next year. In 2024, the projection is the same as in recent weeks: inflation of 3%.
The bulletin, published weekly, gathers estimates for the country’s main economic indicators.
GDP
In the bulletin released today, the Focus also kept the forecast of the Gross Domestic Product (GDP) – the sum of all the riches produced in the country – recorded seven days ago. The projection is for GDP growth of 0.30% in 2022. Four weeks ago the market predicted the expansion of the Brazilian economy by 0.36%.
The Focus registers for the third time in a row a decrease in the expectation of GDP growth for 2023, from 1.55% last week to 1.53%. For 2024, the estimate remained stable at 2%.
Interest rate
The market forecast for the basic interest rate, the Selic, in 2022, was stable for the fourth time compared to last week: 11.75% per year.
Last week, the Monetary Policy Committee (Copom) increased interest rate from 9.25% to 10.75% per annum. The decision was expected by financial analysts.
The rate hit double digits for the first time since July 2017, when it was at 10.25% per year. This was the eighth consecutive readjustment in the Selic rate. In a statement, the Copom indicated that it will continue to raise basic interest rates until inflation is controlled in the medium term.
By the end of 2023, the market estimate is that the basic interest rate will fall to 8% per year. And for 2024, the forecast is for a Selic rate of 7% per year, a calculation that repeats that of previous weeks.
Dollar
Market expectations for the dollar rate in 2022 also remained the same as projected last week: BRL 5.60. For next year, the market estimates that the currency should be at R$ 5.50. For 2024, after a period of stability, the US currency should rise from R$5.40, estimated last week, to R$5.39.
