The forecast of the Financial Market for the National Consumer Price Index (IPCA) – considered the country’s official inflation – went from 5.08% to 5.5% this year. The estimate is in the Focus Bulletin this Monday (27), a survey released weekly by the Central Bank (BC), in Brasilia, with the expectation of financial institutions for the main economic indicators.
For 2026, the projection of inflation also rose from 4.1% to 4.22%. For 2027 and 2028, forecasts are 3.9% and 3.73%, 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%.
With the result of 0.52% in December, The country’s official inflation closed 2024 by 4.83%above the maximum limit of the target stipulated by CMN. By 2023, the IPCA had been 4.62%. According to the Brazilian Institute of Geography and Statistics (IBGE), over the last year, the food and beverage group was the one that most pressed the pockets of Brazilians.
Basic interest
To reach the inflation target, The Central Bank uses the basic interest rate as its main instrument, Selicdefined in 12.25% per year.
The high dollar and the uncertainties around inflation and the global economy made the BC increase the rise in interest rates at the last 2024 meeting in December. This was the third increase followed by Selic and the high consolidates a cycle of contraction in monetary policy. The rate returned to December last year, when it was 12.25% per year.
After spending a year at 13.75% per year – between August 2022 and August 2023 – the rate had six cuts of 0.5 points and a cut of 0.25 point between August last year and May this year. At June and July meetings, Copom decided to keep the rate by 10.5% per year, starting to increase Selic at the September meeting, when the rate rose 0.25 point, and November, when 0.5 point increased.
The agency said it will raise the Selic rate at a percentage point in the next two meetings this year if the scenarios are confirmed. The first meeting of Copom this year takes place this Tuesday (28) and Wednesday (29) and the expectation of the financial market is that the collegiate confirm Selic’s rise to 13.25% per year.
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, 10.38% 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 2.04% to 2.06%. For 2026, the expectation for GDP is growth of 1.72%. For 2027 and 2028, the financial market estimates GDP expansion by 1.96% 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 IBGE, the accumulated rise in the year – from January to September last year – is 3.3%.
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.
