Economists raise projections for interest rates in 2023 and 2024

Analysts consulted by the Central Bank (BC) raised their projections for the basic interest rate both for this year and next, amid inflationary pressures and government criticism of the monetary authority.

The Focus survey released by BC this Monday (13) shows that the projection for the Selic this year rose from 12.50% to 12.75%. The scenario for the end of 2024, in turn, was from 9.75% to 10%.

At the beginning of the month, the BC maintained the Selic rate at 13.75% per annum, at the first meeting of the Copom (Monetary Policy Committee) after President Luiz Inácio Lula da Silva (PT) took office.

For the next meeting, in March, Focus shows that the projection of experts continues to be maintenance of the Selic.

The increase in projections for the basic interest rate comes at a time of caution in the market, amid fears that the BC will give in to government criticism of the interest rate level and the inflation target —the president and allies have recently intensified the complaints about the high level of the Selic rate and inflation targets, in addition to questioning the autonomy of the autarchy.

The survey, which captures the market’s perception of economic indicators, also pointed out that the expectation for an increase in the IPCA (official inflation index) in 2023 was adjusted upwards by 0.01 percentage points, rising to 5.79%, while for next year it was 4%, an increase of 0.07 points.

The center of the official target for inflation in 2023 is 3.25% and for 2024 it is 3%, always with a tolerance margin of 1.5 percentage points, more or less.

For the GDP (Gross Domestic Product), the growth estimate this year fell for the second time in a row, by 0.03 points, to 0.76%. For 2024, it remains at 1.50% for the seventh week in a row.