Focus: Brazil’s Inflation Forecast Rises for Seventh Straight Week

Brazil’s economic outlook is evolving, as revealed by recent forecasts from financial experts. The Central Bank’s Focus Report, released on Monday, shows changing predictions for inflation, interest rates, and economic growth.

These projections offer insights into Brazil’s financial future. Inflation expectations for 2024 have risen for the seventh consecutive week.

Economists now predict a 4.64% increase in the National Consumer Price Index (IPCA), up from 4.62%. This trend suggests growing concerns about price stability in the coming year.

Looking further ahead, the inflation forecast for 2025 has also increased. It now stands at 4.12%, marking the fifth consecutive rise. For 2026, economists expect inflation to reach 3.70%, up from the previous estimate of 3.65%.

The Central Bank‘s inflation target remains at 3% for 2024, 2025, and 2026. However, there is a tolerance margin of 1.5 percentage points above or below this target.

Focus: Brazil’s Inflation Forecast Rises for Seventh Straight Week. (Photo Internet reproduction)

The rising forecasts indicate potential challenges in meeting these goals. Interest rate predictions have also shifted. While the forecast for the basic interest rate (Selic) at the end of 2024 remains at 11.75%, expectations for 2025 have increased.

Economists now predict a rate of 12%, up from 11.50%. Despite these changes, Brazil’s economy is expected to grow. The GDP growth forecast for 2024 remains steady at 3.10%.

For 2025, economists maintain their prediction of 1.94% growth. The 2026 forecast stays unchanged at 2%. Currency exchange rate predictions have also been adjusted.

The median estimate for the dollar at the end of 2024 has risen from R$5.55 to R$5.60 ($0.98). For 2025, the forecast has increased from R$5.48 to R$5.50 ($0.96).