Focus: Analysts lower inflation projections – 06/12/2023 – Market

Experts lowered their expectations for inflation from 2023 to 2026 in the Focus survey, following a stronger-than-expected slowdown in consumer price increases in May.

The survey released this Monday (12) by the Central Bank shows that projections for the IPCA rise are now 5.42% in 2023, 4.04% in 2024, 3.90% in 2025 and 3.88% in 2026.

In the previous week, these accounts were respectively at 5.69%, 4.12%, 4.00% and 4.00%.

The center of the official target for inflation in 2023 is 3.25% and for 2024 and 2025 it is 3.00%, always with a tolerance margin of 1.5 percentage points, more or less. The goal for 2026 should be defined at a meeting of the National Monetary Council this month.

The revision takes place after the IPCA rose 0.23% in May, the weakest result since September 2022 (-0.29%) and well below expectations. This led the index to accumulate in 12 months a rate of 3.94%, the lowest level since October 2020, the last time it was below the 4% mark.

The Focus survey, which captures the market’s perception of economic indicators, pointed out, however, that there were no changes in the expectation of maintaining the basic interest rate at 13.75% at the June meeting of the Copom (Monetary Policy Committee).

Analysts also see the Selic at 12.50% at the end of this year, 10.00% at the end of 2024 and 9.00% in 2025, but reduced the outlook for the end of 2026 to 8.75%, from 9 .0% before.

For GDP (Gross Domestic Product), the weekly survey with a hundred economists showed even better growth prospects in 2023 at 1.84%, from 1.68% before. For 2024, the projection was adjusted by 0.01 percentage point downwards, to 1.27%.