The forecast of the Financial Market for the National Consumer Price Index (IPCA) – considered the country’s official inflation – went from 5.58% to 5.6% this year. This is the 18th elevation in a row. The estimate is in the Focus Bulletin this Monday (17), a survey released weekly by the Central Bank (BC) with the expectation of financial institutions for the main economic indicators.
For 2026, the projection of inflation also rose from 4.3% to 4.35%. For 2027 and 2028, the forecasts were raised to 4% and 3.8%, respectively.
The estimate for 2025 is above the ceiling of the inflation target that must be pursued by the BC. Defined by the National Monetary Council (CMN), the goal is 3%, with a tolerance interval of 1.5 percentage up or down. That is, the lower limit is 1.5% and the upper 4.5%.
In January, the official inflation lost strength and was 0.16% According to the Brazilian Institute of Geography and Statistics (IBGE). This is the smallest result for a month of January since 1994, that is, since before the Real Plan, which began in July of that year.
The explanation for the slowdown of the IPCA is the Itaipu bonus, a discount that millions of Brazilians had in the electricity bill of last month. In December 2024, the IPCA had been 0.52%. The deceleration does not mean that the prices were lower, but that on average they rose at a shorter speed.
In 12 months, the IPCA adds 4.56%.
Basic interest
To achieve the inflation target, the Central Bank uses the basic interest rate, the Selicdefined in 13.25% per year by the Monetary Policy Committee (Copom).
The high dollar and the uncertainties around inflation and the global economy made the BC increased interest rates once again at the January meeting. This was the fourth increase followed by Selic and consolidates a cycle of contraction in monetary policy. Regarding the next meetings, Copom has confirmed that it will raise Selic to 1 percentage point at the March meeting, but did not say whether the Altas will continue at the May meeting, only that they will observe inflation.
For the end of 2025, the basic rate is estimated to rise to 15% per year. For 2026, 2027 and 2028, it is expected to be reduced to 12.5% per year, 10.5% per year and 10% per year, respectively.
When Copom increases the basic interest rate, the purpose is to contain heated demand, and this causes reflexes in prices because the highest interest rates make credit more expensive and stimulate savings. But in addition to Selic, banks consider other factors when defining consumer interest, such as risk of default, profit and administrative expenses. Thus, higher rates can also make it difficult to expand the economy.
When the Selic rate is reduced, credit is tendency to be cheaper, with incentive to production and consumption, reducing control over inflation and stimulating economic activity.
GDP and exchange
The projection of financial institutions for the growth of the Brazilian economy this year went from 2.03% to 2.01%. For 2026, the expectation for GDP is growth of 1.7%. For 2027 and 2028, the financial market estimates GDP expansion by 1.98% and 2%, respectively.
In the third quarter of 2024, the Gross domestic product (GDP – the sum of goods and services produced in the country) rose 0.9% compared to the second quarter. According to the IBGE, the accumulated rise in the year – from January to September last year – is 3.3%.
The official GDP result of 2024 will be released on March 7 by IBGE. In 2023, surpassing projections, the Brazilian economy grew 3.2%. By 2022, the expansion rate was 3%.
The forecast of the dollar quotation is $ 6 for the end of this year. At the end of 2026, it is estimated that the US currency is at the same level.
