Market raises forecasts for inflation and dollar amid uncertainties

In the midst of a scenario of uncertainty generated by discussions on the PEC of the Estoro and the delay of the team of president-elect Luiz Inácio Lula da Silva (PT) to announce a name to head the Treasury, the financial market has been worsening its forecasts for a series of indicators.

This Monday’s Focus Bulletin (28) predicts that the IPCA, which measures official inflation in the country, will end 2022 at 5.91%, compared to the expectation of 5.88% projected the previous week, the fifth consecutive increase. For 2023, the IPCA projection had a slight increase to 5.02%, while previously the projection was 5.01%.

In addition to inflation, the exchange recorded high expectations for the second week in a row, after a sequence of 16 weeks of stability. The forecast for the dollar rose to BRL 5.27 at the end of 2022, against BRL 5.25 the previous week. For 2023, the forecast for the exchange rate was BRL 5.25 at the end of 2023, against BRL 5.24 the previous week.

Expectations for the Selic, the economy’s basic interest rate, this year and next were stable at 13.75% and 11.50%, respectively.

For 2022, the GDP forecast increased from 2.80% to 2.81% from one week to the next. As for 2023, the market maintained its expectation of growth of 0.70%.

See the highlights:

• IPCA rise of 5.91% in 2022, compared to 5.88% in the previous week
• IPCA rise of 5.02% in 2023, compared to 5.01% in the previous week
• Selic at 13.75% at the end of 2022, compared to 13.75% in the previous week
• Selic at 11.50% at the end of 2023, compared to 11.50% in the previous week
• GDP growth in 2022 of 2.81%, compared to 2.80% in the previous week
• GDP growth in 2023 of 0.70%, compared to 0.70% in the previous week
• Exchange rate of BRL 5.27 at the end of 2022, against BRL 5.25 in the previous week
• Exchange rate of BRL 5.25 at the end of 2023, against BRL 5.24 in the previous week
• IPCA at 5.27% over the next 12 months, compared to 5.26% a week before