Economists Predict Inflation Below 5% and Interest Rate Cut in Latest Focus Report
2 sources · Brazil
Who reported this
- CNN Brasil
- Folha de S.Paulo
What the colours mean
- Left
- Centre-left
- Centre
- Centre-right
- Right
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Economists surveyed by the Central Bank in the latest Focus report expect inflation to end the year below 5 percent. The forecast for the IPCA dropped to 4.9 percent, down from 5.0 percent the previous week. This marks the first time since May 18 that the projection has fallen below the 5 percent threshold, although it remains above the official target ceiling of 4.5 percent. The shift follows data from the IBGE showing a 0.32 percent deflation in August, which was driven by lower costs for electricity, fuels, and some foods.
Market analysts also anticipate a 0.25 percentage point cut to the Selic basic interest rate during this week's Copom meeting. This would bring the rate down from 14.00 percent to 13.75 percent. Projections for the Selic rate in 2027 are set at 12 percent.
Economic growth expectations were revised downward. The GDP growth forecast for this year fell to 1.89 percent from 1.93 percent. Additionally, the projection for next year's inflation was slightly adjusted upward to 4.30 percent. The dollar is expected to close the year at R$ 5.20.
How each side framed it
- Centre
- Both outlets provided a neutral, data driven report focusing on the technical indicators of the Focus survey and IBGE data.
Sources
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