Uncertainties in fiscal policy weigh on the increase of 1 percentage point in the base interest rate, at the last BC meeting in 2024; monetary authority signals increases of the same magnitude in the next two meetings
The financial market projects that the Selic will end 2025 at up to 15%. The estimate for the basic interest rate is given after the (Central Bank) decision of (percentage point) and the indication that it should.
In the statement ( – PDF – 36 kB), the (Monetary Policy Committee) signaled “adjustments of the same magnitude in the next two meetings”if there is confirmation of “most adverse scenario for inflation convergence”. Selic ended 2024 at 12.25%.
The basic interest rate guides loan and financing rates. In investments, it influences the performance of applications.
O Poder360 He sought out financial institutions and consultancies to access projections, which range from 12.25% to 15% per year. Here are the estimates:
The Selic is projected to end 2025 at 14.75%. In (PDF – 3 MB), the bank that has Mansueto Almeida as chief economist says that there is a perception in the financial market that “fiscal risks are greater, with faster growth in public debt and the absence of structural measures that would reverse this trend until the end of the decade”.
A also estimates that the base interest rate will reach 14.75% next year. Sérgio Goldenstein, chief strategist at the brokerage, states that the tax aspect weighs heavily on accommodation of the Selic.
“A more moderate trajectory of the Selic rate would depend mainly on a more benign perception of economic agents regarding the fiscal framework, which does not seem likely at the moment, given recent events”he declares.
A expects the Selic to reach 13.50% at the end of 2025. Chief economist at the risk rating agency, Alex Agostini projects that the interest rate curve will peak in May 2025, at 15.00%. Then, it should start to fall from September onwards.
The expert assesses that the fiscal package has already been considered in the BC’s decision to raise the base interest rate by 1 pp “Vwe will have inflationary pressures generated by this loss of expectations, loss of confidence and discouragement of expectations due to this still expansionary fiscal policy. This announced spending package was quite disappointing”says Agostini.
GOVERNMENT
The president’s (PT) government package seeks to cut spending. When detailing the measures on November 28, the impact estimated by the economic team was for 2025 and 2026. The projection for the next 6 years is .
To the Poder360the Minister (Planning and Budget) on Thursday (Dec 12) that the BC’s decision to raise the Selic by 1 pp is partially due to the spending package not yet having advanced in Congress. He also stated that the approval of the text in 2024 has the potential to change the Copom’s indication that it should.
“We have room to work, before the next Copom, with the approval of the adjustment later this year, of the 3 measures. By doing our homework, we can have a positive expectation that what was announced as a projection for the next Copom will not happen in the future”, declared.
The minister said she disagreed with part of the economic team regarding the possible cause of the increase in the basic interest rate. He declared that Brazil is doing well, with employment and GDP (Gross Domestic Product) growing, but that the reason for boosting the exchange rate and interest rates is not “only the external factor”. Regarding Copom’s signage, he stated that he will look at the “day after”.
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