Market starts to see Selic higher in 2023 with greater inflationary pressure, shows Focus

The market began to see greater monetary tightening in 2023 amid higher projections for general inflation and administered prices, showed the Focus survey released by the Central Bank this Monday (18).

The weekly survey of a hundred economists showed the maintenance of the perspective that the basic interest rate will end this year at 13.75%, but for 2023 the Selic account rose to 10.75%, from 10.50%.

This occurs in the midst of a vision of greater pressure on prices in 2023. The survey, which captures the market’s perception of economic indicators, pointed out that the expectation for the rise in the IPCA next year is now 5.20%, of 5.09%, above the target ceiling.

The adjustment was accompanied by an increase in the estimate for the advance of administered prices in 2023, from 6.15% to 6.50%.

Opposite movement happened in the scenario for this year. The estimate for the rise in the IPCA in 2022 fell to 7.54%, from 7.67%, while for administered prices the projection for an advance was 1.74%, from 2.20%.

These movements are against the backdrop of government measures to alleviate high inflation this year, such as the approval of the law that sets a ceiling for ICMS rates on the fuel, gas, energy, communications and public transport sectors. However, it has no lasting effects and analysts warn that these prices will put pressure on general inflation again next year.

The center of the official inflation target for 2022 is 3.5% and for 2023 it is 3.25%, always with a tolerance margin of 1.5 percentage points more or less.

For GDP (Gross Domestic Product), the growth estimate in 2022 improved by 0.16 percentage points, reaching 1.75%, while, for 2023, it remained at 0.50%.