The financial market forecast for the Broad National Consumer Price Index (IPCA) – official reference for inflation in the country – went from 4% to 3.99% in 2026.
The estimate was published this Monday (2) in the Focus bulletin, a survey released weekly, in Brasília, by the Central Bank (BC) with the expectations of financial institutions for the main economic indicators.
For 2027, the inflation projection remained at 3.8%. For 2028 and 2029, forecasts are 3.5% for both years.
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Inflation
For the fourth week in a row, the forecast for 2026 inflation was reduced and is within the target range for price changes 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%.
The first release on the 2026 IPCA will be made on February 10th by the Brazilian Institute of Geography and Statistics (IBGE) with the January index.
In December, the rise in the price of transport via app and airline tickets caused inflation to reach 0.33%above the 0.18% increase recorded in November. The result caused the IPCA to accumulate an increase of 4.26% in 2025.
Selic Rate
To achieve the inflation target, the Central Bank uses as its main instrument the basic interest rate (Selic Rate)currently defined at 15% per year by the BC Monetary Policy Committee (Copom). Despite the decline in inflation and the dollar, the board did not change interest rates for the fifth time in a row at the last meeting.
The rate is at its highest level since July 2006, when it was 15.25% per year. In a statement, the Copom confirmed that it should start reducing interest rates at the March meeting, if inflation remains under control and there are no surprises in the economic scenario.
Market analysts’ estimate is that the base rate will fall to 12.25% per year by the end of 2026, the same forecast as last week’s Focus bulletin.
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.
GDP and exchange rate
In this edition of the Focus bulletin, financial institutions’ estimate for the growth of the Brazilian economy this year remains at 1.8%.
For 2027, the projection for the Gross Domestic Product (GDP, the sum of goods and services produced in the country) was also 1.8%. For 2028 and 2029, the financial market estimates GDP expansion at 2% for both years.
Driven by the expansions of industry and agriculture, in the third quarter of 2025, the Brazilian economy grew 0.1%which is considered by IBGE as stability.
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 GDP reached 4.8%.
The release of the consolidated GDP for 2025 is scheduled by IBGE for March 3rd.
The dollar exchange rate is forecast at R$5.50 for the end of this year. At the end of 2027, it is estimated that the US currency will remain at this same level.
