Focus point: With inflation expected to exceed 7% in 2021, financial market expects Selic to reach 7.50% in December
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São Paulo – With the rising expectations of Brazilian inflation, the financial market also continues to adjust upward expectations for the base interest rate.
The central bank’s Focus report on Monday (16) shows that for the second week, the financial market increased its slick rate expectations at the end of this year, this time from 7.25% to 7.50%. With the adjustment, the estimate for interest rates in December 2022 was also raised, from 7.25% to 7.50%, indicating interest rate stability over the next year.
After increasing one percentage point in Selic in The last meeting of the Monetary Policy Committee (COBOM)To 5.25% in August, a new increase of the same size is expected in September, with interest rates raised to 6.25% annually. For the October meeting, the forecast in the focus point is 7.00% – both estimates unchanged from the previous survey.
For the 19th consecutive week, the market revised upwards its forecast for inflation in 2021, from 6.88% to 7.05%. For 2022, the estimate was also raised, for the fourth week, from 3.84% to 3.90%.
In July, the IPCA’s National Consumer Price Index increased by 0.96% compared to June, the largest increase for the month since 2002. In the year, the IPCA achieved an increase of 4.76%, and in the 12 months it was 8.99%. .
Regarding the performance of the Brazilian economy, the financial market estimates a growth of 5.28% in GDP this year, slightly lower than the previously estimated 5.30%. For 2022, an expansion of 2.04% of GDP is expected, in line with the previous week’s 2.05%.
Finally, in the exchange rate, estimates have been preserved and indicate the dollar was trading at R$5.10 in December and at R$5.20 at the end of 2022.
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