Focus: market reduces inflation forecast for 2023 – 7/10/2023 – Market

Economists consulted by the BC (Central Bank) made few changes to their forecasts for the economy, the weekly bulletin Focus showed this Monday (10), with the emphasis on a slight downward adjustment in the account for the 2023 inflation.

Now, the median forecast is that the IPCA will end this year at a high of 4.95%, against a rate of 4.98% predicted in the previous survey, which marked an eighth consecutive reduction in this estimate.

For 2024, 2025 and 2026, the projections for IPCA increases were maintained at 3.92%, 3.60% and 3.50%, respectively.

The center of the official target for inflation in 2023 is 3.25% and, for the next three years, it is 3.00%, always with a tolerance margin of 1.5 percentage points more or less.

Inflation expectations captured by Focus come from a long downward streak, largely due to signs of cooling in consumer prices in recently released data. These numbers, in turn, have stimulated bets that the Central Bank will soon start a cycle of monetary easing, taking the Selic from the current high level of 13.75%.

The most recent Focus maintained expectations that the basic interest rate will end this year at 12.00% and the next at 9.50%, while the estimate for 2025 remained at 9.00%. For 2026, there was a slight adjustment in the outlook, with Focus starting to incorporate a Selic of 8.75%, from 8.63% before.

The growth estimates for 2023 and 2024 were maintained at 2.19% and 1.28%, respectively.