Bank estimates dollar at R$6.25 by the end of the year if there is no “credible” fiscal adjustment; maintained Selic at 15.25%
BTG revised its projections for the macroeconomic scenario in 2025 and 2026, according to a bulletin released this Wednesday (22 January 2025). For inflation measured by the IPCA (Broad Consumer Price Index), this year’s estimate went from 5.6% to 5.8%, while next year’s remained at 4.4%.
The bank also maintained projections for economic expansion measured by GDP (Gross Domestic Product) of 1.5% for 2025 and 1.4% for 2026.
For the Selic interest rate, the terminal rate remains at 15.25%, with two more increases of 50bps in the May and June meetings, after 2 increases of 100bps indicated in the forward guidance in the latest statement from Copom (Monetary Policy Committee) of the Central Bank.
“Despite the very challenging scenario, the president of the BC, Gabriel Galípolo, said in his participation in the Inflation Report press conference, that the guidance issued at the December meeting remains valid and has a high bar for changes”, says BTG.
The document also points to an estimate of a primary deficit of R$90 billion in 2025. “In the current scenario, meeting the spending limit seems to be a greater challenge than reaching the primary target, depending on the success of fine-tooth comb measures. However, the target also depends on extraordinary revenues, not all of which are fully incorporated into our projections.”, warns the bank in the report.
DOLLAR IN FOCUS
The bank released the macroeconomic report before the fall in the dollar recorded this Wednesday (22 January). BTG maintained, in the document, an exchange rate estimate of R$6.25 at the end of this year.
“Actions that circumvent the Budget, increase parafiscal spending, undermine monetary and exchange rate credibility could lead the exchange rate to surpass the barrier of R$7.00/US$ this year”, warns the team, led by Mansueto Almeida.
However, the bank is considering another scenario that it considers less likely, with “A clear signal of credible fiscal adjustment could realign expectations and take the exchange rate to more appreciated levels, close to R$5.20/US$”.
With information from
