Market trims 2026 inflation projection to 5.01 percent
Financial analysts trimmed Brazil's 2026 inflation projection to 5.01 percent and lowered GDP growth expectations to 1.92 percent, according to the Banco Central do Brasil's Focus survey released on August 28, 2026. The median Selic rate projection held steady at 13.75 percent.
Trimming growth while rate expectations hold
The weekly survey of around 145 market participants shows median IPCA inflation expectations for 2026 edging down to 5.01 percent from 5.02 percent in the previous week and 5.03 percent a month earlier.
Concurrently, projected gross domestic product expansion for 2026 was marked down for a second consecutive week to 1.92 percent, compared to 1.95 percent last week and 1.99 percent four weeks ago.
For 2027, analysts raised their inflation forecast to 4.28 percent from 4.25 percent, while maintaining the growth projection at 1.50 percent.
The median benchmark Selic rate forecast remained unchanged at 13.75 percent for end-2026 across 143 respondents, before declining to 12.00 percent in 2027.
Fiscal deficits and currency stability
Market consensus on the exchange rate held firm at 5.20 reais per US dollar for end-2026 and 5.30 for 2027.
On the fiscal front, net public sector debt is projected to reach 69.90 percent of GDP in 2026, rising to 73.60 percent in 2027 and 79.00 percent by 2029.
The primary deficit expectation remained at 0.50 percent of GDP for 2026, while the nominal deficit projection stayed at 8.79 percent.
The trade surplus for 2026 is forecast at $78.00 billion, alongside $79.73 billion in foreign direct investment.
Sticky rates reflect fiscal drag
The survey reveals growing skepticism about disinflation beyond 2026 as medium-term expectations deteriorate.
With public debt expanding toward 80 percent of GDP, monetary policy will struggle to deliver meaningful easing.
A policy rate stuck near 14 percent confirms that fiscal imbalances remain Brazil's primary anchor.
Source: BCB - Focus Market Readout - 08/28/2026
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