The financial market has again cut estimates for economic growth this year and next, in addition to increasing inflation forecasts, while it started to see a more depreciated exchange rate and maintained expectations of a 1.50 percentage point increase in the Selic rate. week, showed the Central Bank’s Focus survey released this Monday (6).
According to the Focus figures, based on a compilation of forecasts from around one hundred respondents in the BC survey, the basic interest rate will close 2021 at 9.25%, the same forecast as the previous week and compared to the current rate of 7.75% per year. The Selic would still end 2022 at 11.25%, also the same prognosis of the previous week.
The central bank is expected to raise the benchmark interest rate by 1.50 percentage points this week due to lingering fiscal concerns, and will likely also recognize the threat posed by the omicron, a Reuters poll showed last week.
Inflation, which is why the BC has led one of the most aggressive monetary tightenings in the world, should be even higher this year and next.
The forecast for the IPCA (official inflation index of the country) for 2021 went from 10.15% to 10.18%, and for 2022 it was from 5.00% to 5.02%. Inflation in 12 months, however, is now forecast at 5.36% — the previous week, the estimate was 5.48%. It is the second consecutive week that this estimate has fallen. On the other hand, the increase in the outlook for the 2023 IPCA (from 3.42% to 3.50%) is noteworthy, further distancing itself from the target for the year (3.25%).
The GDP (Gross Domestic Product) is expected to grow 4.71% in 2021, below the 4.78% forecast in the previous week. In 2022, the economy will advance 0.51% — the previous week, the estimate was 0.58%.
The dollar will end this year at R$ 5.56 (the value was R$ 5.50 in the previous week’s estimate). At the end of 2022, the US currency will stand at R$ 5.55, whereas last week the forecast was R$ 5.50. It is the first high in estimates after four weeks of stability.
The dollar closed higher on Friday, close to R$ 5.68 and the maximum since April, leveraged by a global movement to seek security and with market agents awaiting the Copom decision next Wednesday.
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