Market raises inflation by more than 6% for the first time

The financial market increased the projection for inflation in 2023, from 5.98% to 6.01%. This was the third high followed by the indicator. The expectation of growth for the Brazilian economy was maintained at 0.90% this year, remaining stagnant for 3 weeks. The market perspectives were released by the Central Bank, through the Focus Bulletin, this Monday (17).

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%. If confirmed, this will be the third year in a row that the inflation target has been exceeded, that is, in which the IPCA is above the ceiling set by the target system. In 2022, inflation amounted to 5.79%.

The preview of GDP (Gross Domestic Product), measured by the Central Bank’s Economic Activity Index (IBC-Br), fell 0.04% in January 2023 compared to the previous month. According to the BC, the Brazilian economy has increased by 3.03% in the accumulated result for the year. In 12 months, the GDP preview advanced 3%.

The survey also pointed to a reduction in expectations for the economy’s basic interest rate, the Selic, from 12.75% to 12.50% per year by the end of 2023. Currently, the Selic rate is already at 13.75% per year.

For the end of 2024, the market projection for the economy’s basic interest remained stable, at 10% per year.