The market raised its expectations for the level of interest rates at the end of next year, anticipating a smaller reduction in the Selic rate throughout 2023, while at the same time predicting a greater increase in public debt, showed the weekly Focus report by the Central Bank released this week. Monday (5).
The analysts’ projection for the Selic rose to 11.75% at the end of next year, from 11.50% predicted a week ago. For this year, the projection was maintained at 13.75%, with the expectation that the Central Bank will not change the rate in its last monetary policy meeting of the year this week.
The measure of expectations for net debt increased to 61.50% of GDP (Gross Domestic Product) at the end of 2023, from 61% before. For this year, the projection is 57.70% of GDP.
Adjustments in expectations take place as the president of the Central Bank, Roberto Campos Neto, has reiterated warnings about the importance of fiscal sustainability at a time when the elected government is negotiating with Congress to approve expenditures of around R$ 200 billion outside the spending ceiling limit for the coming years. The so-called Transition PEC, which proposes release, is expected to be voted on in the Senate this week and has focused the attention of the market.
Analysts consulted by the BC also slightly raised their projections for GDP growth this year and next, now predicting 3.05% (2.81% before) and 0.75% (0.70% before), respectively. Inflation expectations did not suffer relevant adjustments.
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