The first Focus Bulletin of 2026 presented stability indices in three of the four medians projected by the financial market. The only one that presented a variation in relation to the last weeks of 2025 was that related to the expectation of projected inflation for the current year, which varied from the 4.05% projected last week, to 4.06% according to the bulletin released this Monday (5) by the Central Bank.
The country’s official inflation is based on the Broad Consumer Price Index (IPCA). The 0.01 percentage point variation presented in this bulletin occurs after a sequence of eight consecutive estimates of decline. Four weeks ago, the financial market projected inflation of 4.16% at the end of 2016.
For subsequent years, inflation projections have remained stable for nine weeks, at 3.80% in 2027; and 3.50% in 2028
Inflation target
Defined by the National Monetary Council (CMN), the inflation target for 2025 is 3%, with a tolerance range of 1.5 percentage points up or down. In other words, the lower limit is 1.5%, and the upper limit is 4.5%.
The official inflation preview for December was 0.25%, a result that makes the 12-month cumulative figure 4.41%, within the limit of the government’s target.
It was the second month in a row with accumulated inflation within the tolerance margin. In November, the IPCA-15 had dropped to 4.5%, after having been outside the limit since January. In April, the highest point since then, it reached 5.49%.
The numbers were released by the Brazilian Institute of Geography and Statistics (IBGE).
GDP
Both financial market projections for the exchange rate, the basic interest rate (Selic) and the economy’s GDP (Gross Domestic Product, the sum of all goods and services produced in the country) have shown stability in recent weeks.
In the case of GDP, projections are for growth of 1.8% in 2026 – the same percentage projected for 2027. For the following year (2028), the growth estimated by the financial market for the economy is 2%.
Exchange and Selic
Regarding the exchange rate, the financial market projects that the dollar will close 2026 with a price of R$5.50, a value that has not changed for 12 consecutive weeks. For 2027 and 2028, the projected prices for the US currency are, respectively, R$5.50 and R$5.52.
Selic, which closed 2025 at 15%, is expected to fall to 12.25% throughout 2026; to 10.50% in 2027; and 9.75% in 2028.
The basic interest rate is at its highest level since July 2006, when it was 15.25% per year. After reaching 10.5% per year in May last yearthe rate began to be raised in September 2024. The Selic reached 15% per year at the June meeting, having been maintained at that level since then.
When Copom increases the Selic, the purpose is to contain heated demand; This has an impact on prices because higher interest rates make credit more expensive and encourage savings. Therefore, higher rates can also make it difficult for the economy to expand. Banks also consider other factors when defining the interest charged to consumers, such as risk of default, profit and administrative expenses.
When the Selic rate is reduced, the tendency is for credit to become cheaper, encouraging production and consumption, reducing control over inflation and stimulating economic activity.
