The financial market increased its inflation forecast for this year for the ninth consecutive time. According to a projection of the Bulletin Focus, released today (14), in Brasília, by the Central Bank, the Broad Consumer Price Index (IPCA) should close this year at 6.45%. A week ago, the projection was that inflation this year would be 5.65%. Four weeks ago it was 5.50%.
Published weekly, the Focus Bulletin gathers estimates from more than 100 market institutions for the country’s main economic indicators. A few weeks ago, estimates were already pointing to inflation above the target defined by the National Monetary Council (CMN) for this year (3.5%), with a variation of 1.5 percentage points.
Market numbers are above those projected by the Monetary Policy Committee (Copom) at the meeting held in February, which also showed inflation above target.
“The Copom inflation projections are around 5.4% for 2022 and 3.2% for 2023. This scenario assumes an interest rate trajectory that rises to 12% per year in the first half of 2022 and ends the year at 11.75% per year”, said the Copom minutes published last month.
For 2023, the market also increased the projection of the IPCA variation – the country’s official inflation. With this, the projection indicates inflation of 3.71% compared to 3.51% estimated last week. Four weeks ago, the calculation was for an inflation of 3.5% next year.
For 2024, the market also projects an increase in relation to previous estimates. The new forecast is that, in 2024, inflation will be at 3.15%, compared to 3.1% last week. Four weeks ago, the estimate indicated the IPCA closing 2024 at 3.04%.
GDP
In this week’s projection, the Focus Bulletin also raised the forecast of the Gross Domestic Product (GDP, the sum of goods and services produced in the country) recorded seven days ago. The new projection is for a GDP of 0.49% in 2022, compared to the 0.42% forecast last week.
For 2023, however, the bulletin recorded a reduction in the expectation of growth compared to last week, from 1.5% to 1.43%. Four weeks ago, the forecast was that GDP would grow by 1.5%. For 2024, the projection was stable at 2%.
Interest rate and exchange
The market also projected an increase in the basic interest rate, the Selic, for 2022. In the estimate released this Monday, the Selic rate should remain at 12.75% against 12.25% last week.
In February, in addition to estimating inflation above the target, the Copom also increased the interest rate from 9.25% to 10.75% per year. In a statement, the committee indicated that it will continue to raise basic interest rates until inflation is controlled in the medium term.
Towards the end of 2023, the market study for Selic has also increased. The new projection is for the base rate to stay at 8.75% per year against 8.25% last week. And for 2024, the forecast went from 7.38% in the previous week to 7.50% per year.
The market’s expectation for the dollar rate in 2022 was R$5.30, a reduction compared to what was projected last week, when the market predicted an exchange rate of R$5.40.
For next year, the market forecast is also for a fall in the exchange rate, from R$5.30 to R$5.21. For 2024, the estimate for the price of the American currency was BRL 5.20, compared to BRL 5.30 projected last week.
