Focus: market reduces inflation expectations for 2023 – 03/27/2023 – Market

The market marginally reduced its inflation forecast for this year, but raised estimates for 2024 and 2025 again. Experts maintained their forecasts for the Selic rate and made adjustments to the prospects for economic activity, shows the Focus survey this Monday (27) .

Economists now expect the IPCA to rise 5.93% in 2023, against a rate of 5.95% estimated the previous week. This was the second downward adjustment to the account for inflation after a flat reading in early March, which followed a long run of increases.

For next year and 2025, the inflation forecast rose slightly to 4.13% and 4.00%, respectively, from 4.11% and 3.90% beforehand.

Investors fear a weakening of expectations for the IPCA after recent criticisms by President Luiz Inácio Lula da Silva of the conduct of monetary policy by the Central Bank, with the level of 13.75% of the Selic rate in the government’s sights.

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 plus or minus 1.5 percentage points.

Economists surveyed in the Focus survey maintained expectations that basic interest rates will end this year at 12.75% and the next at 10.00%.

For GDP (Gross Domestic Product), the growth estimate this year improved marginally to 0.90%, from 0.88% the week before. For 2024, the projection fell to 1.40%, from 1.47% before.