Brazil 2026 inflation forecast falls to 5.02 percent

According to the latest Focus survey, median market expectations for Brazil's IPCA consumer price index in 2026 edged down from 5.03 percent to 5.02 percent over the past week, marking a continued downward trend from 5.16 percent four weeks ago.

For 2027, inflation expectations held firm at 4.22 percent, while the 12-month smoothed projection rose slightly to 4.24 percent.

Gross domestic product growth projections for 2026 dipped to 1.98 percent from 1.99 percent, with 2027 growth expectations slowing to 1.52 percent.

Analysts maintained their end-of-year Selic rate forecasts at 13.75 percent for 2026 and 12.00 percent for 2027, while the US dollar exchange rate forecast for 2026 remained unchanged at 5.20 Reais per dollar.

Broad market indicators show mixed movements across fiscal and external accounts.

The IGP-M inflation index forecast for 2026 decreased to 4.47 percent from 4.54 percent a week prior.

On the trade side, market participants raised their 2026 trade surplus projection to 76.90 billion US dollars, up from 76.80 billion US dollars.

Foreign direct investment estimates for 2026 ticked up slightly to 78.48 billion US dollars.

Meanwhile, net public sector debt for 2026 was kept stable at 69.90 percent of GDP, with the primary deficit expected to remain at 0.50 percent of GDP.