The latest Focus Bulletin indicates steady inflation expectations for this year, with a slight dip for next year.
Analysts predict the official rate to stabilize at 4.63% for 2023, a small drop from last month. For 2024, expectations worsened slightly to 3.91%.
The median based on recent updates also echoes this trend.
For 2024 and 2025, slight rises in inflation projections were noted. Yet, estimates for 2025 and 2026 held firm at 3.50%.
These figures suggest a cautious re-anchoring to the inflation target of 3.0% in the coming years.
Projections remain above the central target for inflation. However, they’re under the upper limit for 2023, hinting at no breach for the third year.
For subsequent years, the forecasts align with target ranges but overshoot the central goal.
The Central Bank’s recent meeting updated its projections. The IPCA is now expected at 4.7% for 2023, up to 3.6% for 2024, and a slight increase for 2025.
The Selic rate was cut again, now at 12.25% annually.
Short-term inflation predictions in the bulletin did not change. The outlook for the next year edged up slightly.
A shift to a continuous inflation target starting in 2025 is under discussion, with no final decree yet.
Outlook
September’s current account deficit was the lowest for the month since 2020, outperforming forecasts.
The cumulative deficit is the smallest since June 2021 relative to GDP.
The exchange rate forecast for 2023 remains at R$5.00, stable from the previous month.
The Selic rate expectation by the end of 2023 stays put at 11.75%, with a projected decrease by the end of 2024.
The GDP outlook for 2023 is at 2.89% growth, unchanged from last month.
Growth rates for the next two years remain stable, with a slight public debt projection adjustment for 2023.
The primary deficit forecast in relation to GDP is unmoved at 1.10%.