A inflation in Brazil should have ended 2025 with an increase of 4,30%falling below the upper limit of the target Banco Central for the second consecutive month in December, according to the median estimates of 20 economists consulted by Reuters in the last two weeks.
The continued target for price increases measured by IPCA is from 3,0%with a tolerance margin of 1.5 percentage points plus or minus.
In November, the IPCA accumulated an increase of 4.49% in 12 months, going below the target ceiling for the first time since September 2024 amid the BC’s restrictive monetary policy.
IBGE will release IPCA data for December on Friday amid expectations for the start of Selic cutscurrently at 15%, while the Central Bank has been preaching caution.
“According to our projections, food should have closed with an increase of just 1.5% and services, 6.0%. We see the tight labor market as the main reason behind this worsening in services inflation throughout 2025”, said Flavio Serrano, chief economist at Banco BMG.
The unemployment rate in Brazil fell in the three months up to November to the lowest level since the beginning of the historical series in 2012, in contrast to other indicators that reflect a weaker economy.
In the month of December, the expectation in the survey is for a increase of 0.35% in the IPCA, compared to 0.18% in November.
“The acceleration of market prices, given the end-of-year seasonality, together with services, which still oscillate positively, should be the main contributors to higher inflation (in the month)”, said Rodolpho Sartori, economist at Austin Rating.
In addition to the still high trajectory of service prices, the BC is also paying attention to inflation expectations, which are in slow decline and currently point to a rate of 4.06% at the end of 2026, according to the latest Focus survey.
The next BC meeting will be on January 27th and 28th. Most economists said in a separate Reuters poll last month that they expect Selic maintenancepredicting the start of interest cuts in March, at the second meeting of the year.
