The financial market’s forecast for the Broad National Consumer Price Index (IPCA) increased for the fifth consecutive week, rising from the 4.2% projected last week to 4.22%, according to the Focus Bulletin released this Monday (19) by the Central Bank (BC), based on the expectations of financial institutions. The IPCA is considered the country’s official inflation.
The expectation for 2025 fell compared to last week, standing at 3.91%. A week ago, it was at 3.97%. For 2026, it remained stable at 3.6%.
In the case of the estimate for the current year, it is above the inflation target, which is 3%. However, it is within the tolerance margin, which is 1.5 percentage points above or below. Therefore, the lower limit is 1.5%; and the upper limit is 4.5%.
From 2025 onwards, the continuous target system will come into effect, meaning that the National Monetary Council (CMN) will no longer need to set an inflation target each year. The board set the center of inflation continuous target at 3%with a tolerance margin of 1.5 percentage points up or down.
GDP
The financial market has improved its expectations regarding the Gross Domestic Product (GDP), the sum of all wealth produced in the country. Last week, the projected growth for 2024 was 2.2%. This week, it increased to 2.23%. For 2025, GDP growth expectations are at 1.89%, below the 1.92% projected a week ago. And for 2026, it has been stable for 54 weeks at 2%.
Exceeding projections, in 2023 the Brazilian economy grew 2.9%, with a total value of R$10.9 trillion, according to the IBGE. In 2022, the growth rate was 3%.
Selic and dollar
Regarding the basic interest rate (Selic), expectations have remained stable for 9 weeks, at 10.50% for 2024. For 2025, it rose from the 9.75% projected a week ago, standing at 10%; and in 2026, it has been stable for 14 weeks at 9%. Selic is the main instrument adopted by the Central Bank to achieve the inflation target.
In July, driven mainly by the price of gasoline, plane tickets and electricity, the The country’s inflation was 0.38%, after having registered 0.21% in June. According to the Brazilian Institute of Geography and Statistics (IBGE), in 12 months, the IPCA accumulated 4.5%, at the upper limit of the inflation target.
Expectations related to the exchange rate project that the dollar will reach the end of 2024 quoted at R$5.31, a value slightly higher than that projected last week (R$5.30). For 2025 and 2026, the financial market maintains stable projections, at R$5.30 and R$5.25, respectively.
