Brazil market outlook: Inflation, GDP forecasts increase

Market participants now expect higher inflation and stronger economic growth for Brazil in 2026.

The median forecast for the Extended National Consumer Price Index (IPCA) for 2026 rose to 5.04 percent, up from 4.92 percent a week prior.

Similarly, the Gross Domestic Product (GDP) growth projection for 2026 increased slightly to 1.89 percent from 1.85 percent.

Conversely, the median expectation for the exchange rate against the US dollar for 2026 saw a decrease, settling at R$5.17 compared to R$5.20 last week.

The Selic target rate for 2026 remained stable at 13.25 percent.

These adjustments reflect evolving perceptions of domestic economic conditions and global financial dynamics.

Other key economic indicators also saw shifts in market expectations.

The General Market Price Index (IGP-M) for 2026 increased to 5.91 percent from 5.63 percent a week ago, while regulated prices for the same year rose to 4.99 percent.

For 2027, the Selic target rate remained stable at 11.25 percent, reflecting consistent expectations for medium-term monetary policy.

The forecast for Net Public Sector Debt as a percentage of GDP for 2026 slightly improved, declining to 69.83 percent from 69.90 percent, indicating a marginal easing of fiscal concerns among analysts.