Economic Forecasts Shift: Analysts Revise Selic Rate Projections Upward

The latest Focus Report from Brazil’s Central Bank reveals a nuanced economic outlook for the coming years.

Analysts have maintained their projections for inflation and GDP growth in 2024. However, they have revised their estimates for the basic interest rate upward.

The IPCA inflation forecast for 2024 remains steady at 4.37%, halting a ten-week streak of increases.

Analysts expect inflation to reach 3.97% in 2025 and 3.60% in 2026. The 2027 projection has held steady at 3.50% for over a year.

Economists predict GDP growth will stay at 3.0% for 2024, following six consecutive weeks of upward revisions.

They have slightly increased their 2025 growth forecast from 1.90% to 1.92%. Projections for 2026 and 2027 remain unchanged at 2.0%.

The Selic rate, Brazil’s basic interest rate, is now expected to reach 11.75% in 2024, up from the previous estimate of 11.50%.

Analysts have also raised their 2025 Selic forecast from 10.50% to 10.75%. Projections for 2026 and 2027 remain stable at 9.50% and 9.0%, respectively.

Currency exchange rate forecasts show stability. Analysts predict the dollar will trade at R$ 5.40 in 2024 and R$ 5.35 in 2025. Projections for 2026 and 2027 hold steady at R$ 5.30.

Brazil’s primary budget deficit is expected to reach 0.60% of GDP in 2024. Analysts have slightly improved their 2025 forecast from 0.74% to 0.73% of GDP. They anticipate deficits of 0.67% in 2026 and 0.30% in 2027.

Economic Forecasts Shift: Analysts Revise Selic Rate Projections Upward

Public debt projections remain unchanged for 2024 and 2025 at 63.50% and 66.50% of GDP, respectively. Estimates for 2026 and 2027 have increased marginally to 69.23% and 71.48% of GDP.

The trade balance forecast for 2024 remains at US$ 81.0 billion. Analysts have slightly lowered their projections for 2025 and 2026. The 2027 estimate holds steady at US$ 80.0 billion.

These forecasts provide a comprehensive view of Brazil’s economic landscape. They reflect both stability in some areas and adjustments in others, particularly regarding interest rates and public finances.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.