Brazil’s central bank revises inflation forecast for this year downward to 5.8%

Brazil’s central bank has lowered its official inflation forecast for 2022 to 5.8 percent, down from 8.8 percent in June.

The information is contained in the quarterly inflation report released Thursday by the monetary authority.

Despite the improvement in expectations, the forecast was higher than the official target for this year.

The inflation target for 2022, as measured by the national consumer price index, is 3.5 percent, with a confidence interval of 1.5 percentage points, so the tolerance range is between 2 and 5 percent.

Suppose inflation is above this level at the end of the year.

In that case, the president of the Central Bank, Roberto Campos Neto, must issue a public letter explaining the reasons for non-compliance.

The law that authorized the autonomy of Brazil’s central bank stipulates that the fundamental task of the monetary authority is to safeguard the population’s purchasing power.

For 2023, the central bank raised its inflation forecast from 4 to 4.6 percent, slightly below next year’s target of 4.75 percent.

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