Expectations for next year’s IPCA are far from the target ceiling; estimate for Selic at the end of 2026 drops from 12.25% to 12.13%
The median Focus report for 2025 fell from 4.40% to 4.36%. The rate is 0.14 percentage points below the target ceiling of 4.50%. A month ago, it was 4.46%. Considering only the 60 estimates updated in the last five business days, the measure decreased from 4.38% to 4.35%. The projection for the 2026 IPCA fell from 4.16% to 4.10%. A month ago, it was 4.20%. Considering only the 60 estimates updated in the last five business days, the median fell from 4.10% to 4.06%.
The IPCA is expected to add 4.4% in 2025 and 3.5% in 2026, according to the trajectory disclosed in the statement from the December meeting of the Monetary Policy Committee (Copom), published last week. In the relevant horizon, the second quarter of 2027, the board expects inflation in 12 months to be 3.2%.
In the last decision, the Copom maintained the rate at 15%, for the fourth consecutive time. In the statement, the panel stated that the current strategy, of maintaining the current level of interest rates for a very long period, is adequate to ensure the convergence of inflation to the target. He added that he will remain vigilant and said that “future steps of monetary policy may be adjusted and that, as usual, he will not hesitate to resume the adjustment cycle if he deems it appropriate”.
From this year onwards, the inflation target is continuous, based on the IPCA accumulated over 12 months. The center is 3%, with a tolerance of 1.5 percentage points more or less.
If inflation stays outside this range for six consecutive months, the BC is considered to have missed the target. This happened after the release of the IPCA for June, on July 10th. The monetary authority published an open letter informing that it expects the rate to fall below 4.50% at the end of the first quarter of 2026.
The Focus median for 2027 inflation remained at 3.80%, for the 6th consecutive week. The projection for the 2028 IPCA remained stable at 3.50%, also for the 6th week in a row.
Selic at the end of 2026 goes from 12.25% to 12.13%
The median of the Focus report for Selic at the end of 2026 fell from 12.25% to 12.13%. A month ago, it was at 12.25%. Considering only the 49 estimates updated in the last five business days, the median rose from 12.13% to 12.25%.
Last week, the Monetary Policy Committee (Copom) decided to maintain the Selic at 15% for the fourth time in a row. The decision came in line with the Focus median for the Selic at the end of 2025, which remained stable at this level for 24 consecutive weeks.
In the statement, the panel stated that the current strategy, of maintaining the current level of interest rates for a very long period, is adequate to ensure the convergence of inflation to the target. He added that he will remain vigilant and said that “future steps of monetary policy may be adjusted and that, as usual, he will not hesitate to resume the adjustment cycle if he deems it appropriate”.
The projection for the end of 2027 remained at 10.50% for the 44th week in a row. The median for Selic at the end of 2028 remained at 9.50%. A month ago, it was at 10.00%.
GDP growth projection for 2025 remains at 2.25%; 2026 remains at 1.80%
The median Focus for Brazilian Gross Domestic Product () growth in 2025 remained at 2.25%. A month earlier, it was 2.16%. Considering only the 37 projections updated in the last five business days, which are more sensitive to news, the estimate rose from 2.25% to 2.28%.
The Central Bank reduced its growth estimate for the Brazilian economy this year, from 2.1% to 2.0%, in the Monetary Policy Report (RPM) for the third quarter. According to the municipality, the reduction occurred due to the still uncertain effects of the increase in import tariffs and signs of moderation in economic activity in the third quarter. These factors, however, were partially offset by more favorable forecasts for agriculture and the extractive industry, he said.
Focus’s intermediate estimate for Brazilian economic growth in 2026 also remained at 1.80%. A month earlier, it was 1.78%. Considering only the 37 projections updated in the last five business days, it increased from 1.80% to 1.83%.
The median for GDP growth in 2027 went from 1.84% to 1.83%. Four weeks earlier, it was 1.88%. The intermediate estimate for 2028 remained stable, at 2.00%, for the 92nd week in a row.
Dollar at the end of 2025 remains at R$5.40 and at the end of 2026 it remains at R$5.50
The median of the Focus report for the price at the end of 2025 remained at R$5.40, for the 4th consecutive week. The intermediate estimate for the end of 2026 remained at R$5.50, for the 9th week in a row.
Projections for the American currency at the end of 2027 and 2028 also remained stable, at R$5.50, for the 7th consecutive week.
The annual exchange rate projection published in Focus is calculated based on the average for the rate in December, and not on the projected value for the last business day of each year, as it was until 2020.
*With information from Estadão Conteúdo
Published by Nícolas Robert
