Citi raised its estimate for the hike of the Broad National Consumer Price Index (IPCA) this year to 10.4%, down from 9.5% previously, and said it sees upside risks to its 2022 forecast, a 4 advance, 3%.
The revision came after the IBGE informed this Wednesday (10) that the IPCA rose 1.25% in October, after rising 1.16% in the previous month, reaching the biggest change for the month since 2002 (1.31% ).
In 12 months, the IPCA rose 10.67%, compared to 10.25% in September, the strongest result since January 2016 (+10.71%). The reading came above the expectations of economists consulted by Reuters, who expected 1.05% advance on a monthly basis and 10.45% in 12 months.
The stronger-than-expected readings “add upside risks to our 4.3% forecast for a late 2022 IPCA hike and a 11.0% terminal Selic rate,” Citi analysts wrote in a report this Wednesday (10).
The Selic rate is currently at 7.75% per annum, after the Central Bank increased 150 basis points at the last Copom meeting.
Reference: CNN Brasil
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