BRASÍLA (Reuters) – Central Bank President Roberto Campos Neto said on Wednesday that inflation in Brazil has fallen, but pressures remain amid a “relatively strong” demand component.
In a presentation released by the autarchy, used in a closed meeting with investors organized by XP in Washington, Campos Neto also said that long-term inflation expectations were anchored in 2022, but since last November a process of deterioration has begun.
The Focus bulletin, which captures market projections for economic indicators, shows that inflation expectations continue to worsen, even over longer horizons. The median of estimates for the IPCA in 2024 increased from 4.02% a month ago to 4.14% this week. For 2025, the data increased from 3.80% to 4%.
Amid the monetary tightening to control inflation, the BC president said that data suggest a cooling of the job market. Campos Neto pointed out that there is a slowdown in new credit operations, with a change in the composition of loans to high-cost categories, raising default rates.
The president of the Central Bank stated that between November of last year and January of this year, the market had been predicting further increases in the Selic rate, but this view changed as of February, with expectations of a cut in the basic rate within a six-month horizon.
Currently, Selic is at 13.75% per annum, the highest level since the beginning of 2017.
(By Bernardo Caram)
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