Estimate for this year continues above the 3% target ceiling that should be pursued by the Central Bank; For 2026, the projection also fell from 4.29% to 4.28%
The forecast of the financial market for the – Considered to Country Officer – went from 4.83% to 4.81% this year. The estimate was published in the Focus Bulletin this Monday (29), a survey released weekly by with the expectation of financial institutions for the main economic indicators. For 2026, inflation projection also fell from 4.29% to 4.28%. For 2027 and 2028, predictions are 3.9% and 3.7%, respectively.
The estimate for this year is above the ceiling of the inflation target that should be pursued by the BC. Defined by the National Monetary Council (CMN), the goal is 3%, with a tolerance interval of 1.5 percentage up or down. That is, the lower limit is 1.5% and the upper 4.5%.
In August, pulled by the reduction in the electricity bill, official inflation was negative, ie deflation of 0.11%. With the result, the IPCA accumulated in 12 months was 5.13%, according to the Brazilian Institute of Statistical Geography (IBGE).
Basic interest
To achieve the inflation target, the Central Bank uses the basic interest rate – Selic – defined at 15% per year by BC. The uncertainties of the external economic scenario and indicators that show moderation in internal growth are among the factors that led to Selic maintenance at the last meeting this month. The collegiate’s intention is, according to the minutes disclosed, to maintain the current interest rate “for a very prolonged period” to ensure that the inflation target is reached.
Analysts estimate is that the basic rate ends 2025 this 15% per year. For the end of 2026, Selic is expected to fall to 12.25% per year. For 2027 and 2028, it is expected to be reduced again to 10.5% per year and 10% per year, respectively. When the copom increases the basic interest rate, the purpose is to contain heated demand, and this causes reflexes in prices because higher interest rates make credit more expensive and stimulate savings. But in addition to Selic, banks consider other factors when defining consumer interest, such as risk of default, profit and administrative expenses.
Thus, higher rates can also make it difficult to expand the economy. When the Selic rate is reduced the tendency is that credit is cheaper, with incentive to production and consumption, reducing control over inflation and stimulating economic activity.
GDP and exchange
In this edition of the Focus Bulletin, the estimate of financial institutions for the growth of the Brazilian economy this year was maintained at 2.16%. For 2026, the projection for 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 by 1.9% and 2%, respectively.
Pulled by the expansions of services and industry, in the second quarter of this year, the Brazilian economy grew 0.4%. By 2024, GDP closed with a 1.4%increase. The result represents the fourth year in a row in growth, with the highest expansion since 2021, when GDP reached 4.8%. The forecast of the dollar quotation is $ 5.48 for the end of this year. At the end of 2026, it is estimated that the US currency is $ 5.58.
