Financial market reduces inflation estimate to 3.87% in 2024

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Numbers were released this Monday by the BC; The target will be met if inflation remains between 1.5% and 4.5%. Report maintained expected GDP growth at 1.59%. The financial market reduced the inflation estimate to 3.87% in 2024. Last week, the projection was 3.9%. The data comes from the Focus bulletin, published this Monday (15) by the Central Bank based on data collected from financial institutions. For 2024, the inflation target that the Central Bank should pursue is 3%, which may vary between 1.5% and 4.5%. In other words, the projection of 3.87% is within the permitted range. The higher the inflation, the lower people’s purchasing power, especially those who receive lower salaries. This is because the price of products increases without wages following this variation. The basic interest rate, the Selic, is the Central Bank’s main instrument for pursuing the inflation target. Today, it is at 11.75% per year. The financial market’s expectation is that the Selic will be reduced to 9% per year in 2024. For 2025, the rate should remain at 8.5%. In addition to inflation, economists also reduced the expected average price of the dollar in 2024, from R$5.00 to R$4.95. Economic growth The market expects growth of 1.59% in the Gross Domestic Product (GDP) in 2024. The projection is stable in relation to the previous week. GDP is the sum of all goods and services produced in the country. The indicator serves to measure economic activity. This Monday’s bulletin (15) also points to a growth in the trade balance — the difference between what is exported and imported by Brazil. If the balance is positive, it means that Brazil exported more than it imported during the period. Economists’ expectation is that the balance will be US$75 billion in 2024. The government’s projection is US$94.4 billion, slightly below the record value recorded in 2023, of US$98 billion. Other indicators Foreign investment: direct investment in Brazil should reach US$65 billion, according to the latest financial market projections. The index is stable in relation to the last Focus bulletin; Public sector net debt: the rate is published in relation to GDP. The latest projection is for debt to be 64.25% of GDP, also stable in relation to the last release.

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