Market increases inflation projections for 2022 and 2023 again, shows Focus

Economists’ expectation for the rise in consumer prices this year and next has risen again, the Central Bank’s weekly Focus survey showed this Monday (2), although the forecast for economic activity in 2022 has improved slightly, even given the challenging inflationary scenario.

The IPCA should advance 7.89% this year and 4.10% in 2023, according to the new projections, compared to rates of 7.65% and 4.00%, respectively, estimated before. The 2022 forecast amended its 16th straight high, while next year’s forecast was adjusted upward for the fourth straight report.

Both accounts indicate that inflation will exceed the centers of the official targets – which are 3.50% for this year and 3.25% for the next, always with a tolerance margin of 1.5 percentage points more or less.

In a context of successive deterioration in expectations of higher prices, the market maintained the previous week’s estimate that the Central Bank will raise the Selic rate, currently at 11.75%, to 12.75% at its meeting this week and to 13, 25% by the end of this year. There was an upward adjustment in the projection for the interest level at the end of 2023, to 9.25%, from 9.00% before.

Despite high inflation and the prospect of an even more restrictive monetary policy, there was a slight improvement in the account for economic expansion in 2022. Economists consulted now expect GDP (Gross Domestic Product) to increase by 0.70% this year, against a rate of 0.65% seen previously. The 2023 forecast was maintained at 1.00% growth.

The Focus survey was released again on Monday – although outside the normal time, 8:25 am (GMT) – after being resumed last Tuesday after a hiatus of almost a month, caused by a strike by Central Bank servers. . The strike, which affected the publication of several other economic indicators, was even suspended, but will resume on Tuesday (3), according to the National Union of BC Employees.