Financial market forecasts for the main economic indicators in 2026 – the expansion of the economy and the inflation index – remained stable in this Monday’s edition (2) of the Focus Bulletin. The survey of financial institutions is published weekly by the Central Bank (BC).
The estimate for the growth of the Brazilian economy this year remained at 1.82%. For 2027, the projection for the Gross Domestic Product (GDP, the sum of goods and services produced in the country) was 1.8%. For 2028 and 2029, the financial market estimates GDP expansion at 2%, for both years.
Driven by the expansion of industry and agriculture, in the third quarter of 2025 the Brazilian economy grew 0.1%which is considered by the Brazilian Institute of Geography and Statistics (IBGE) as stability. The release of the consolidated GDP for 2025 is scheduled for this Tuesday (3).
In 2024, GDP closed with an increase of 3.4%. The result represents the fourth consecutive year of growth, being the biggest expansion since 2021 when it reached 4.8%.
The dollar exchange rate forecast is R$5.42 for the end of this year. At the end of 2027, it is estimated that the North American currency will be R$5.50.
Inflation
After seven consecutive weeks of decline, the financial market forecast for the Broad National Consumer Price Index (IPCA) – considered the country’s official inflation – remained at 3.91% for this year. For 2027, the inflation projection increased from 3.8% to 3.79%. For 2028 and 2029, forecasts are 3.5% for both years.
The estimate for price variation in 2026 remains within the target range that should be pursued by the BC. Defined by the National Monetary Council (CMN), the target 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%.
In January, the rise in electricity bill and gasoline prices caused official inflation for the month closes at 0.33%same level as in December. According to IBGE, the result led the IPCA to accumulate an increase of 4.44% in 2025.
Basic interest
To achieve the inflation target, the Central Bank uses the basic interest rate (Selic) as its main instrument, currently set at 15% per year by the BC’s Monetary Policy Committee (Copom). Despite the decline in inflation and the dollar, the collegiate did not affect interest at the last meeting, for the fifth time in a row, at the end of January.
The rate is at the highest level since July 2006, when it stood at 15.25% per year. In minutes, the Copom confirmed that it will begin reducing interest rates at the March meeting, if inflation remains under control and there are no surprises in the economic scenario. Even so, interest will be maintained at restrictive levels.
Market analysts’ estimate for the basic rate was reduced in this edition of the Focus Bulletin – from 12.13% per year to 12% per year until the end of 2026. For 2027 and 2028, the forecast is that the Selic will be reduced again to 10.5% per year and 10% per year, respectively. In 2029, the rate should reach 9.5% per year.
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, credit tends to become cheaper, encouraging production and consumption, reducing control over inflation and stimulating economic activity.
