RIO DE JANEIRO, BRAZIL – The market now sees greater monetary tightening both this year and next, amid increasingly higher projections for inflation, showed the Focus survey released by the Central Bank on Monday.
The expectation for the SELIC benchmark interest rate at the end of this year rose to 6.63% on the median of the projections, from 6.50% in the previous survey. The current rate is 4.25%. By 2022, the SELIC is now seen at 7.0%, from 6.75%.
The weekly survey also pointed to a 0.04 percentage point increase in expectations for the rise in the IPCA (inflation index) in 2021, to 6.11%, while the projection for 2022 fell 0.02 point, to 3.75%.
The center of the official inflation target for 2021 is 3.75%, and for 2022 it is 3.50%, always with a margin of tolerance of 1.5 percentage points more or less.
For gross domestic product (GDP), the growth estimate improved this year and reached 5.26%, from 5.18% previously. But for next year there was a slight 0.01 point drop, to 2.09%.