Brazilian market expectations show rising inflation, stable GDP

Market expectations for Brazil's benchmark inflation index, the IPCA, have shown an upward trend for 2026.

The median projection for 2026 increased to 4.36 percent, up from 4.31 percent a week prior.

This marks the fourth consecutive week of an upward trend for the year-end forecast.

For 2027, IPCA expectations also saw a slight increase to 3.85 percent.

In contrast, expectations for GDP growth remained stable at 1.85 percent for 2026 and 1.80 percent for 2027.

The exchange rate forecast for 2026 held steady at R$5.40 per US dollar, with a similar stability observed for 2027 at R$5.45 per US dollar.

These figures reflect a consensus among respondents, with a high number of participants contributing to the median aggregates.

Expectations for the Selic target rate, Brazil's key policy rate, remained unchanged at 12.50 percent for 2026, reflecting a consensus among 150 respondents.

The forecast for 2027 also held steady at 10.50 percent.

Beyond the monetary policy outlook, the IGP-M inflation index saw an increase to 3.73 percent for 2026, continuing an upward trend.

Regulated prices, however, showed stability at 4.27 percent for 2026.

Fiscal indicators presented a stable picture, with Net Public Sector Debt projected at 69.90 percent of GDP for 2026.