2026 Brazilian inflation forecast falls to 5.03 percent

The latest Focus survey reveals a fifth consecutive weekly drop in the median 2026 IPCA consumer price inflation expectation, moving down to 5.03 percent from 5.12 percent a week prior and 5.30 percent four weeks ago.

For 2027, analysts kept the IPCA forecast unchanged at 4.22 percent, while IGP-M inflation expectations for 2026 dropped sharply from 5.42 percent to 4.54 percent.

Reflecting lower near-term inflation projections, respondents reduced their median expectation for the 2026 year-end Selic policy rate from 14.00 percent to 13.75 percent.

Meanwhile, GDP growth forecasts for 2026 held steady at 1.99 percent for a fifth straight week, though projected growth for 2027 edged down to 1.57 percent from 1.60 percent.

In the external sector, market expectations for the 2026 trade surplus increased to $76.80 billion, up from $76.20 billion reported in the previous survey.

Foreign direct investment projections for 2026 also rose to $78.45 billion from $77.85 billion a week ago.

The median exchange rate projection for year-end 2026 remained unchanged at 5.20 reais per US dollar.

On fiscal metrics, net public sector debt is now expected to reach 69.90 percent of GDP in 2026, slightly higher than the 69.80 percent projected in the prior week, while the primary deficit estimate held at 0.50 percent.