Financial markets raise their forecast for Selic in 2022 and expect a rate of 11.75% in December

Financial markets raised their exchange rate forecast this year from 11.50% to 11.75%. This is what was shown by the “Fox” report issued by the Central Bank on Monday morning (10).

The Monetary Policy Committee (Copom) is expected to raise the policy rate by 1.5 percentage points at its next meeting, to be held in February, from the current 9.25% to 10.75% annually. For 2023, estimates remained at the Selic rate of 8.00% per annum.

The new forecast comes amid an environment of strong inflationary pressures. Economists consulted by the monetary authority estimate an inflation rate of 9.99% in 2021, compared to a forecast of 10.01% previously.

The National Broadband Consumer Price Index (IPCA) data for December will be released this Tuesday (11). Bradesco expects a gain of 0.63% month over month, while Itaú forecasts a rise of 0.68%, which will take the 2021 IPCA to 10.01%.

Market analysts remember that after the IPCA is issued, the central bank may publish an open letter to the Minister of Economy explaining the reasons for inflation above the target in 2021, with the ability to list measures to ensure that inflation returns to established limits. Now in 2022.

For this year, inflation expectations remain at 5.03%, while in 2023, the median market expectation is for an increase of 3.36%, down from the previously expected 3.41%.

Regarding the performance of economic activity, the focus points to an expansion of 4.50% of GDP in 2021 – the same as forecast in the previous survey. For 2022, economists have lowered the Brazilian economy’s growth forecast from 0.36% to 0.28%.

For 2023, estimates suggest a 1.70% expansion in activity, down from the 1.80% forecast in the last survey.

Finally, in terms of exchange, the forecast for 2022 in US dollars remained at R$5.60, but increased from R$5.40 to R$5.45 in 2023.