Financial market reduces estimate and now sees inflation below 4.5% in 2023

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Numbers were released this Monday (18) by the BC. Bank analysts maintained stable inflation and economic growth estimates in 2024. Financial market economists reduced this year’s inflation expectation from 4.51% to 4.49%. It is the first time since June 2022 that analysts see this year’s IPCA below 4.5%. The information is contained in the “Focus” report, released this Monday (18) by the Central Bank. The survey heard from more than 100 financial institutions last week about projections for the economy. With the drop, analysts’ estimates for 2023 inflation remain below the target ceiling defined by the National Monetary Council (CMN). The central inflation target is 3.25% this year, and will be considered formally met if the index oscillates between 1.75% and 4.75% this year. If the financial market’s projection is confirmed, a two-year sequence of non-compliance with the inflation target will be interrupted. In 2021, the IPCA totaled 10.06%. And, in 2022, inflation totaled 5.79%. Special g1: what is inflation Understand: how inflation affects your pocket For 2024, the inflation estimate remained stable at 3.93% in the last week. Next year, the inflation target is 3% and will be considered met if it fluctuates between 1.5% and 4.5%. To define the basic interest rate and try to contain the rise in prices, the BC is already aiming, at this moment, at next year’s target, and also at twelve months until the beginning of 2025. The higher the inflation, the lower the purchasing power of people, especially those who receive lower salaries. This is because the prices of products increase, without wages keeping up with this growth. Gross Domestic Product Regarding the result of the Gross Domestic Product (GDP) for 2023, the financial market maintained its growth projection at 2.92%. GDP is the sum of all goods and services produced in the country. The indicator serves to measure the evolution of the economy. For 2024, the economic growth forecast for the financial market remained at 1.51%. Interest rate Financial market economists maintained their estimates for the basic interest rate of the Brazilian economy for the end of this year and 2024. Currently, the Selic rate is at 11.75% per year, after four consecutive reductions promoted by the Bank Central. For the end of 2024, the market projection for the economy’s basic interest rate remained stable at 9.25% per year. Other estimates See below other financial market estimates, according to the BC: Dollar: the projection for the exchange rate for the end of 2023 fell from R$4.95 to R$4.93. For the end of 2024, the estimate remained stable at R$5. Trade balance: for the balance of trade (result of total exports minus imports), the projection rose from R$78.8 billion to US$79, 8 billion surplus in 2023. For 2024, the expectation for a positive balance increased from US$68.5 billion to US$69 billion. Foreign investment: the report’s forecast for the entry of foreign direct investment into Brazil this year fell from US$61.5 billion to US$60.3 billion. For 2024, the estimated inflow remained at US$70 billion. VIDEOS: economic news

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