Market raises inflation projection to 5.09% in 2026; 12th discharge in a row

BC (Central Bank) financial market analysts raised their projection for Brazilian inflation for the 12th consecutive week.

The IPCA (Broad Consumer Price Index) rose to 5.09% this Monday (1st), registering a slight increase of 0.05 p.p (percentage point) in relation to the last release of the Focus report (5.04%).

The increase in the index was also present in estimates for the next two years. For 2027 and 2028, the projection was 4.02% and 3.66%, respectively.

In addition to the IPCA, the GDP (Gross Domestic Product) also registered an increase in this Monday's release. In the report, the country's internal growth went from 1.89% last week to 1.90% in this publication, registering the 2nd consecutive increase.

Last Friday (29), the IBGE (Brazilian Institute of Geography and Statistics) reported that GDP grew 1.1% in the first quarter, accelerating due to the boost in agriculture and industry and with consumption gaining strength.

Focus: Medians for the IPCA in 2026 and 2027 rise | MARKET OPENING

For the coming years, however, the projection was in line with the previous release, of 1.70% for 2027 and 2% for 2028.

Meanwhile, the exchange rate was the only index to record a fall this week. In the report, the currency recorded a timid drop from R$5.17 to R$5.16 in this week's release.

The drop was also recorded in the estimate for 2027, in which the exchange rate fell to R$5.25. Regarding 2028, the projection remained in line with last week, at R$ 5.30.

This week, the basic interest rate (Selic) followed last week's expectations, remaining at 13.25% for 2026. For the next two years, projections also did not change this week, remaining at 11.25% for 2027 and 10% for 2028.

*With information from Reuters.

Ranking: Brazil has the 3rd highest real interest rate in the world with Selic at 11.25%

Source: CNN