Brazil's Economic Outlook: Projections in Motion

The latest Focus report from the Brazilian Central Bank (BC) on Monday provided new projections for Brazil’s economy, reflecting economists' market perceptions. The official inflation rate, measured by IPCA, remains at 4.90% for 2026 but saw slight adjustments in projections for subsequent years: it rose to 4.30% for 2027 and stayed constant at 3.80% for 2028. The IPCA smoothed index increased slightly to 4.65%. For the benchmark interest rate (Selic), projections remained stable at 13.75% for 2026, while it was pegged at 12% for 2027 and 10.50% for 2028. Economic growth is projected to decelerate from an estimated 1.89% in 2026 to 1.45% in 2027, with a further slowdown to 1.87% by 2028. The dollar maintained its projections at R$5.20 for 2026 and R$5.30 for both 2027 and 2028. These projections indicate an economy grappling with high inflation but showing signs of stabilization over the long-term horizon.