After a month without the release of the Focus survey, economists’ projections for inflation this year have increased strongly, according to the bulletin released by the Central Bank on Tuesday (26).
The survey pointed out that expectations for the rise of the IPCA (National Broad Consumer Price Index) rose to 7.65% in 2022, from 6.86% at the end of March. There are already 15 consecutive weeks of highs, the projection was at 7.46% in the April 14th bulletin, also published this Tuesday.
The BC had not released the Focus survey since March 28, when the weekly publication was interrupted due to the strike by BC servers.
The strike, which began on April 1, was suspended last Tuesday (19) for two weeks. With that, the monetary authority resumed the publication of data. Before the mobilization intensified, the release of the report had already been delayed.
In the last bulletin published by the BC, almost a month ago, the projection for the IPCA for 2022 completed 11 consecutive weeks of highs in the year, considering the impact of the war in Ukraine on commodity prices. In early January, the estimate was 5.03%.
Market expectations place inflation further and further away from the objective pursued by the BC, which for this year is 3.50%, with a tolerance margin of more or less 1.5 percentage points. In the Quarterly Inflation Report, released in March, the BC admitted that it saw a high probability of a new breach of the inflation target.
If the projections are confirmed, it will be the second consecutive overflow of the target, which is established by the CMN (National Monetary Council). In 2021, the IPCA totaled 10.06%, the highest since 2015.
For 2023, the year considered to have the greatest weight in the BC’s relevant horizon, the median projection for the IPCA jumped from 3.80% to 4% in one month. In the previous week, the indicator was at 3.91%. Next year’s inflation has also been placed above the center of the 3.25% target – with a tolerance range of 1.75% to 4.75% next year.
Economists’ expectation for the basic interest rate (Selic) at the end of this year is 13.25%, compared to a rate of 13% estimated in March. The account for 2023, in turn, remained stable at 9%, as in the last reading that had been released.
The BC has already signaled that the aggressive monetary tightening has not yet come to an end. Currently, the Selic is at 11.75% per year. On May 3 and 4, the Copom (Monetary Policy Committee) will meet again and should indicate a further increase of one percentage point, with the rate reaching the level of 12.75% per year.
For GDP (Gross Domestic Product), the weekly survey showed that estimates are for growth of 0.65% this year and 1% next year, compared to 0.5% and 1.30% in the last survey released.
The Focus survey brings estimates from economists from more than one hundred financial institutions on various indicators, such as economic activity, basic interest rates, inflation and exchange rates. The weekly report helps in decision-making by the BC collegiate.
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