In the 6th high in a row, financial market raises to 5.48% inflation estimate in 2023

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Investors’ forecast exceeds the target ceiling set by the CMN for this year, which is up to 4.75%. A new estimate was released after President Lula said that the current inflation target hinders growth. Financial market economists raised their inflation estimate for this year from 5.39% to 5.48%. It was the sixth consecutive high of the indicator. The information is contained in the “Focus” report, released this Monday (23) by the Central Bank. More than 100 financial institutions were heard last week about the projections for the economy. Special g1: what is inflation Understand: how inflation affects your pocket The new increase happened after president Luiz Inácio Lula da Silva criticized the independence of the Central Bank and said that the current inflation target hinders growth – indicating that he can act to raise it. For this year, the central inflation target was set at 3.25% by the National Monetary Council (CMN) and will be considered formally met if it fluctuates between 1.75% and 4.75%. The higher the inflation, the lower the purchasing power of people, especially those earning lower wages. This is because the prices of products increase without wages accompanying this growth. For 2024, financial market inflation projection remained stable at 3.70% last week. The inflation target for next year, defined by the National Monetary Council (CMN), is 3% and will be considered achieved if it oscillates between 1.5% and 4.5%. Last year, inflation reached 5.79% and was above the target set by the CMN (the ceiling was 5%) for the second consecutive year. Gross Domestic Product For Gross Domestic Product (GDP) growth in 2023, the financial market lowered its stable forecast from 0.78% to 0.77%. GDP is the sum of all goods and services produced in the country. The indicator serves to measure the evolution of the economy. For 2024, the growth forecast remained stable at 1.5%. Interest rate The financial market raised expectations for the economy’s basic interest rate, the Selic, from 12.25% to 12.50% per year by the end of 2023. Currently, the Selic rate is already at 13.75 % per year. The Copom has also been signaling that interest rates will remain high for a longer period. As a result, the financial market continues to estimate a drop in interest rates this year. For the end of 2024, the market projection for the economy’s basic interest remained at 9.25% per year, with a further reduction. Other estimates See below other financial market estimates, according to BC: Dollar: the projection for the exchange rate for the end of 2023 remained at R$ 5.28. By the end of 2024, it remained at R$5.30. Trade balance: for the trade balance balance (result of total exports minus imports), the projection rose from US$ 56.6 billion to US$ 57.2 billion in surplus in 2023. For 2024, the expectation for the balance Positive continued at $52.4 billion. Foreign investment: the report forecast for the inflow of foreign direct investment in Brazil this year remained at US$ 80 billion inflow. For 2024, the inflow estimate dropped from US$ 80 billion to US$ 77.5 billion. VIDEOS: economic news

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