Market raises forecast for inflation in 2023 and 2024 and for Selic next year

The Focus Bulletin released this Monday (23) by the Central Bank brings a new forecast of high inflation by financial market agents. According to the survey, the IPCA should end the year 2023 at 5.48%, compared to the 5.39% predicted the week before.

If the projection comes true, it will be the third consecutive year that inflation will end the year above the target set by the National Monetary Council (CMN). According to BC, the center of the target for 2023 is 3.25%, which may vary by 1.5 percentage points up or down.

For 2024, the IPCA projection is also high and should be 3.84%, while the previous week the forecast was 3.70%. The inflation target for next year is 3%, that is, if the forecast is confirmed, it would be a new hole in the target.

Despite the forecast for high inflation, the economy’s basic interest rate should remain at 12.50% this year, the same value predicted the week before.

However, for 2024, the value was raised to 9.50%, compared to a forecast of 9.25% in the previous week. The increase in basic interest rates occurs when the Central Bank sees the need to reduce inflation in the country.

According to data collected by the BC, the forecast for economic growth also showed slight acceleration again and was 0.79%. In the previous week, the projection was that the GDP was 0.77% this year.

Also according to Focus, the exchange rate should remain stable at R$ 5.28 this year, the same projection as the previous week. For the next year, the projection was also stable, at R$ 5.30.

See main predictions:

• IPCA rise of 5.48% in 2023, compared to 5.39% in the previous week
• IPCA rise of 3.84% in 2024, compared to 3.70% in the previous week
• Selic at 12.50% at the end of 2023, compared to 12.50% the week before
• Selic at 9.50% at the end of 2024, compared to 9.25% in the previous week
• GDP growth in 2023 of 0.79%, compared to 0.77% in the previous week
• GDP growth in 2024 of 1.50%, compared to 1.50% in the previous week
• Exchange rate of BRL 5.28 at the end of 2023, against BRL 5.28 in the previous week
• Exchange rate of BRL 5.30 at the end of 2024, against BRL 5.30 in the previous week
• Exchange rate of BRL 5.30 at the end of 2024, against BRL 5.30 in the previous week
• IPCA at 5.42% over the next 12 months, compared to 5.36% a week before