Inflation forecast rises to 5.01 percent as Brazilian growth slows

The weekly survey of over 140 financial institutions shows 2026 IPCA inflation expectations rising for a third consecutive week to 5.01 percent, up from 4.99 percent last week, with the five-day moving median reaching 5.07 percent.

Concurrently, projected GDP expansion for 2026 decreased for the fourth straight week to 1.85 percent, down from 1.86 percent previously and 1.93 percent four weeks ago.

For 2027, analysts reduced their growth projection to 1.40 percent while lowering IPCA inflation expectations marginally to 4.30 percent.

The median estimate for the year-end Selic benchmark rate remained steady at 13.50 percent for 2026 and 12.00 percent for 2027, alongside a stable 2026 exchange rate forecast of 5.20 reais per dollar.

Fiscal indicators point to continuing structural challenges, with net public sector debt projected at 70.00 percent of GDP in 2026 before expanding to 73.75 percent in 2027.

The nominal budget deficit is estimated at 8.88 percent of GDP for 2026, alongside a primary deficit of 0.41 percent.

External accounts provide a buffer, as the 2026 trade surplus estimate widened to $78.30 billion while foreign direct investment inflows held at $80.00 billion.

Over the longer horizon, the median Selic forecast drops to 10.50 percent in 2028 and 10.00 percent in 2029.