Brazil: the market projects higher inflation and lower growth until 2025

Market analysts projected a new high in inflation for 2023, according to the Focus Bulletin released on Monday, 17.

The Broad Consumer Price Index (IPCA) is expected to close the year at 6.01%, compared to the projection of 5.98% last week.

For 2024, it also increased, with a projection of 4.18%, against 4.14% last week.

For 2025, the analysts maintained a projection of 4%.

Besides higher inflation, analysts also project a drop in economic growth.

For 2023 the Gross Domestic Product (GDP) is expected to grow 0.9%, down from 0.91% last week.

Deceleration was also projected for 2024 and 2025.

Next year, the projection is for GDP growth of 1.4%, down from 1.44% last week.

For 2025, the projection is for growth of 1.72%, versus 1.76% last week.

Regarding the basic interest rate, for the first time in eight weeks, analysts are projecting a drop, closing 2023 at 12.5%, down from 12.75% in the previous weeks.

Currently, the Selic is at 13.75%. For 2024 and 2025, analysts have maintained the interest rate projection of 10% and 9%, respectively.

The projection for the dollar rate also changed after several weeks of stability.

Analysts now estimate that the North American currency will close the year worth R$5.24, not R$5.25, as in previous weeks.

Published every Monday, the Focus Bulletin summarizes statistics calculated considering market expectations collected until the Friday before its release.

The report brings the graphical evolution and the weekly behavior of projections for price indexes (inflation), economic activity, foreign exchange, and the Selic rate, among other indicators.

The projections come from the market, not from the Central Bank.

With information from Revista Oeste