Brazil 2026 inflation forecast edges down to 5.12 percent
The Central Bank of Brazil's July 24 Focus Market Readout shows analysts lowered the 2026 IPCA inflation median to 5.12 percent. The benchmark Selic target remains anchored at 14.00 percent for the year.
Inflation edges down as Selic holds
According to the Central Bank of Brazil's survey of market expectations published on July 24, 2026, the median forecast for the IPCA inflation index in 2026 ticked down to 5.12 percent from 5.15 percent the previous week.
Meanwhile, expectations for the benchmark Selic target rate remained unchanged at 14.00 percent per annum for 2026, and at 12.00 percent for 2027.
Market participants project the 2026 GDP growth rate to remain steady at 1.99 percent, while the 2027 GDP growth forecast dipped slightly to 1.60 percent.
The exchange rate is projected at 5.20 R$/US$ for 2026 and 5.29 R$/US$ for 2027, reflecting stable near-term external assumptions among surveyed financial institutions.
Trade balance strengthens further
Longer-term indicators in the readout show persistent fiscal and external adjustments.
The trade balance surplus for 2026 increased to US$ 77.85 billion from 75.59 billion a week prior, supported by robust foreign direct investment projections of US$ 77.85 billion.
Net public sector debt for 2026 is estimated at 69.80 percent of GDP, a slight downward revision from the prior week.
The primary fiscal result projection remains anchored at a deficit of 0.50 percent of GDP for 2026, while the nominal deficit is projected at 8.70 percent.
High rates anchor expectations
The survey underscores the bank's success in keeping inflation expectations stable despite fiscal pressures.
Maintaining the Selic rate at 14.00 percent exerts necessary tightening across the economy.
Without this firm stance, long-term inflation convergence would remain at serious risk.
Source: BCB - Focus Market Readout - 07/24/2026
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