Market raises forecasts for GDP and reduces inflation in 2022 and 2023

The financial market has improved the economic scenario of 2022 and 2023, showed the Focus Bulletin released this Monday (12) by the Central Bank (BC). The document brought a new expectation of a fall in inflation and a rise in GDP (Gross Domestic Product) for the two years, in addition to a stabilization for the Selic rate.

For this year, forecasts point to a rise of 6.40% in the IPCA, which measures official inflation, compared to 6.61% in the previous week.

The expectation for economic growth in 2022 rose to 2.39%, up from 2.26% in the previous week.

As for the basic interest rate, the market expects the Selic to be maintained at 13.75% until December, despite BC President Roberto Campos Neto having signaled a new high at the next meeting of the Monetary Policy Council (Copom) , scheduled for next week.

For 2023, the market also expects inflation increasingly closer to the ceiling of the target, of 5.17%, compared to 5.27% in the previous week. The target ceiling for the year is 4.75%.

For GDP, the expectation is for growth of 0.5%, compared to 0.47% in the previous week. The number is still far from that projected by the government’s economic team, which expects growth of 2.5%.

The basic interest rate remains unchanged, according to the market, at 11.75%.

It is worth mentioning who for 2024, a relevant horizon for the monetary authority, expected inflation rose to 3.47%, compared to 3.43 % in the previous year. For GDP, the forecast was maintained at 1.8%.

For 2025, expected inflation remains at 3%, while the country’s economic growth remains at 2%, forecasts show.

Main highlights:

IPCA high of 6.40% in 2022, compared to 6.61% in the previous week
IPCA high of 5.17% in 2023, compared to 5.27% in the previous week
Selic at 13.75% at the end of 2022, compared to 13.75% in the previous week
Selic at 11.25% at the end of 2023, compared to 11.25% in the previous week
GDP growth in 2022 of 2.39%, up from 2.26% in the previous week
GDP growth in 2023 of 0.50%, up from 0.47% in the previous week
Exchange rate of BRL 5.20 at the end of 2022, compared to BRL 5.20 the week before
Exchange rate of BRL 5.20 at the end of 2023, compared to BRL 5.20 in the previous week