2026 inflation forecast rises to 4.99 percent as growth slows
Financial market analysts raised their 2026 IPCA inflation forecast to 4.99 percent while lowering projected GDP growth to 1.86 percent, according to the Banco Central do Brasil's Focus Market Readout published on September 25, 2026. The year-end Selic rate expectation held at 13.50 percent.
Higher prices meet slowing growth
The median projection for 2026 IPCA inflation increased from 4.92 percent to 4.99 percent across 144 surveyed institutions, with the five-day moving median reaching 5.08 percent.
Concurrently, market expectations for 2026 GDP expansion fell for a third consecutive week, dropping from 1.88 percent to 1.86 percent.
Expectations for the benchmark Selic target rate held steady at 13.50 percent by year-end 2026, following a reduction from 13.75 percent four weeks earlier.
The exchange rate projection for the end of 2026 remained stable at 5.20 Brazilian reais per US dollar for the fifteenth consecutive week.
The IGP-M index forecast rose to 4.76 percent from 4.73 percent, while regulated price inflation expectations increased slightly to 4.63 percent from 4.61 percent.
The multi-year disinflation path
For 2027, surveyed analysts raised the IPCA estimate to 4.31 percent and trimmed GDP growth to 1.41 percent, projecting the Selic rate to decline to 12.00 percent.
Expectations for 2028 and 2029 anticipate inflation at 3.80 percent and 3.50 percent, with policy rates easing to 10.50 percent and 10.00 percent, respectively.
On the fiscal side, net public sector debt is projected to reach 70.00 percent of GDP in 2026 and rise to 73.80 percent in 2027.
The primary deficit forecast for 2026 improved slightly to 0.41 percent of GDP.
Unanchored and constrained
The upward drift in 2026 inflation projections shows that market expectations remain unanchored from the official target.
Coupling higher price pressures with softening economic growth creates an uncomfortable dilemma for policymakers.
Without meaningful fiscal restraint, the projected rate cuts toward 10.00 percent will prove unrealistic.
Source: BCB - Focus Market Readout - 09/25/2026
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