THE Financial Financial Market Forecast for the Broad National Consumer Price Index (IPCA) – considered the country’s official inflation – from 5.1% to 5.09% this year. It is the ninth reduction followed by the estimate, published in the Focus Bulletin this Monday (28). The survey is released weekly by the Central Bank (BC) with the expectation of financial institutions for the main economic indicators.
For 2026, the projection of inflation was reduced from 4.45% to 4.44%. For 2027 and 2028, predictions are 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 point up or down. That is, the lower limit is 1.5% and the upper 4.5%.
In June, even pressured by electricity, official inflation – released by the Brazilian Institute of Geography and Statistics (IBGE) – lost strength and closed at 0.24%, marked by the first drop in food price after nine months. Despite the slowdown in recent months, the 12 -month accumulated index has reached 5.35%, being for the sixth month in a row above the target ceiling of up to 4.5%.
This period of six months over 4.5% constitutes a goal over the new regime adopted in 2024. Each time this happens, the president of the BC has to disclose, by open letter to Minister of Financewhich presides over the CMN, the detailed description of the causes of non -compliance, the measures to ensure the return of inflation to the established limits and the period in which the measures are expected to have effect.
Basic interest
To reach the inflation target, the Central Bank uses as its main instrument to basic interest rateSelic, defined at 15% per year by the Monetary Policy Committee (COPOM). Despite the recent retreat of inflation, the Uncertainties regarding the economy made the collegiate raise interest rates by 0.25 percentage point at the last meeting last month, and the seventh increase followed by Selic in a cycle of contraction in monetary policy.
In minutes, the Copom said he should keep interest on the same level in the next meetingswhile observing the effects of Selic’s high cycle on the economy. However, it no longer dismissed increases if inflation rises. The next board meeting takes place this Tuesday (29) and Wednesday (30).
THE Decision surprised part of the financial market, which did not expect a new increase and, in this scenario, the estimate of analysts is that the basic rate will end 2025 by 15% per year. For the end of 2026, Selic is expected to fall to 12.5% per year. For 2027 and 2028, it is expected to be reduced again to 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 the tendency is that credit is cheaper, with incentive to production and consumption, reducing control over inflation and stimulating economic activity.
GDP and exchange
The estimate of financial institutions for the growth of the Brazilian economy this year remained 2.23% in this edition of the Focus Bulletin. For 2026, the projection for Gross Domestic Product (GDP – the sum of goods and services produced in the country) went from 1.88% to 1.89%. For 2027 and 2028, the financial market estimates GDP expansion by 2%for the two years.
Pulled by agriculture in the first quarter of 2025, the Brazilian economy grew 1.4%according to IBGE. By 2024, GDP closed with a 1.4%increase. The result represents the fourth year in a row in growth, with the highest expansion since 2021 when GDP reached 4.8%.
The forecast of the dollar quotation is $ 5.60 for the end of this year. At the end of 2026, the US currency is estimated to be $ 5.70.
