The financial market forecast for the Broad National Consumer Price Index (IPCA) – considered the country’s official inflation – went from 4.4% to 4.36% this year. The estimate was published in the Focus bulletin this Monday (15), a survey released weekly by the Central Bank (BC) with the expectations of financial institutions for the main economic indicators.
For 2026, the inflation projection varied from 4.16% to 4.1%. For 2027 and 2028, forecasts are 3.8% and 3.5%, respectively.
For the fifth week in a row, the forecast was reduced, reaching the inflation 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. That is, the lower limit is 1.5% and the upper limit is 4.5%.
The rise in the price of airline tickets made November inflation reaches 0.18%. In October, the IPCA was 0.09%.
As a result, inflation accumulated in 12 months is 4.46%, within the CMN target.
Basic interest
To achieve the inflation target, the Central Bank uses as its main instrument the basic interest rate – the Selic – set at 15% per year by the BC’s Monetary Policy Committee (Copom). The decline in inflation and the slowdown in the economy led to maintenance of Selic for the fourth time in a row.
The board gave no clues as to when it should start cutting interest rates. In a statement, the BC informed that the current scenario is marked by great uncertainty, which requires caution in monetary policy, and that the BC’s strategy is to maintain the Selic at this level for a long time..
The 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 year, the 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.
Market analysts estimate that the basic rate will fall to 12.13% per year by the end of 2026. For 2027 and 2028, the forecast is that the Selic will be reduced again to 10.5% per year and 9.5% per year, respectively.
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..
GDP and exchange rate
In this edition of the Focus bulletin, financial institutions’ estimate for the growth of the Brazilian economy this year remained at 2.25%.
For 2026, the projection for the Gross Domestic Product (GDP, the sum of goods and services produced in the country) was 1.8%. For 2027 and 2028, the financial market estimates GDP expansion at 1.83% and 2%, respectively.
Driven by the expansion of services and industry, in the second quarter of this year the Brazilian economy grew 0.4%. 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 forecast for the dollar exchange rate is R$5.40 for the end of this year. At the end of 2026, it is estimated that the US currency will be at R$5.50.
