Focus Bulletin: financial market raises inflation forecast for 2024 and 2025 and projects greater economic growth this year

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Numbers were released this Tuesday (9) by the BC. Market analysts kept their forecast for GDP expansion unchanged next year. Financial market analysts raised inflation expectations for 2024 and 2025, at the same time that they also began to project greater economic growth this year. The information is contained in the “Focus” report, released this Tuesday (9) by the Central Bank. The survey heard from more than 100 financial institutions last week about projections for the economy. For inflation in 2024, analysts at financial institutions raised the estimate from 3.75% to 3.76%. As a result, analysts’ expectations for 2024 inflation remain below the target ceiling defined by the National Monetary Council (CMN). The central inflation target is 3% this year, and will be considered formally met if the index oscillates between 1.5% and 4.5% this year. Special g1: what is inflation Understand: how inflation affects your pocket For 2025, the inflation estimate increased from 3.51% to 3.53% 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 12 months until mid-2025. The higher the inflation, the lower the power people’s purchasing power, especially those who receive lower salaries. This is because the prices of products increase, without wages keeping up with this growth. Meals away from home have risen more than inflation since the pandemic. Gross Domestic Product For growth in Gross Domestic Product (GDP) this year, the projection rose from 1.89% to 1.90%. It was the eighth consecutive increase in the indicator. For 2025, the financial market’s forecast for an increase in GDP remained stable at 2%. GDP is the sum of all goods and services produced in the country. The indicator serves to measure the evolution of the economy. In 2023, Brazil’s GDP grew 2.9%, according to the Brazilian Institute of Geography and Statistics (IBGE). Interest rate Financial market economists maintained their estimates for the basic interest rate of the Brazilian economy for the end of this year and 2025. Currently, the Selic rate is at 10.75% per year, after six 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% per year. For the end of 2025, in turn, the financial market maintained its stable projection at 8.5% 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 2024 was stable at R$4.95. For the end of 2025, the estimate remained at R$5. Trade balance: for the balance of trade (result of total exports minus imports), the projection fell from US$82 billion to US$80.5 billion surplus in 2024. For 2025, the expectation for a positive balance remained at US$74.6 billion. Foreign investment: the report’s forecast for the entry of foreign direct investment into Brazil this year remained at US$65 billion. For 2025, the inflow estimate remained stable at US$73.1 billion. Selic rate: understand what the basic interest rate is for the Brazilian economy

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