RIO DE JANEIRO, BRAZIL – The market continued to increase expectations for inflation this year for the 25th week in a row while continuing to see lower growth in economic activity in 2022, showed the Focus bulletin released by the Central Bank on Monday (27).
The survey showed that the projected rise in the IPCA index in 2021 is 8.45%, from 8.35% in the previous week. For 2022, the projected rise also increased and went to 4.12%, from 4.10% before.
The center of the official inflation target for 2021 is 3.75% and for 2022 is 3.50%, always with a margin of tolerance of 1.5 percentage points plus or minus.
Last week, the Central Bank increased the basic interest rate SELIC by one percentage point to 6.25% per year. It indicated that it would move into “contractionary territory” as it continues its aggressive monetary tightening cycle to tame inflation that has proven more persistent and widespread.
The market is now awaiting Tuesday’s release of the meeting minutes for more details on the decision. Also, on Thursday, the Central Bank will release its Inflation Report.
For the Gross Domestic Product (GDP), the growth estimate for this year was maintained at 5.04%, but for next year, it fell 0.06 percentage points to 1.57%.
The weekly survey of 100 economists also showed no change in the benchmark interest rate outlook, with the SELIC projection remaining at 8.25% this year and 8.50% next year.