Market predicts lower inflation with government measures, but projects high in 2023

The market began to see practically zero variation in administered prices this year and again reduced expectations for consumer inflation, but for 2023 the projection for the rise in general prices increased for the 16th time in a row, according to the Focus survey released by the Central Bank. this Monday (25th).

The forecast of economists consulted for the rise in administered prices in 2022 changed to a positive variation of 0.01%, from 1.74% in the previous week. As a result, the calculation for the rise of the IPCA this year fell for the fourth time, reaching 7.30%, from 7.54% before.

The review comes in the wake of government measures to alleviate high inflation this year, such as the approval of a law that sets a cap on ICMS rates on the fuel, gas, energy, communications and public transport sectors.

But analysts warn that the law does not have lasting effects, and as a result, they began to see even greater pressure from inflation in 2023. Economists consulted in the Focus survey began to estimate the IPCA advance next year at 5.30%, 0.10 percentage point higher than in the previous reading. The rise in administered prices next year is now calculated at 7.06%, from 6.50% before.

With this scenario, in both years inflation will end up well above the ceiling of the official target, whose center is at 3.5% for 2022 and 3.25% for 2023, always with a tolerance margin of 1.5 percentage points for more or less.

The survey, which captures the market’s perception of economic indicators, also showed an improvement in the outlook for this year’s GDP (Gross Domestic Product), with the growth estimate rising from 1.75% to 1.93%. For 2023, however, there was an adjustment of 0.01 percentage point downwards, to 0.49%.

The weekly survey of a hundred economists also showed that the Selic interest rate should end this year at 13.75% and the next at 10.75%, unchanged from the previous survey.