Analysts expect a reduction of 0.25 percentage points at the meeting on Wednesday (May 8); GDP growth is expected to be 2.05% this year
Financial analysts interviewed by the BC (Central Bank) increased the estimate for the basic rate, the Selic, for the end of 2024 from 9.50% to 9.63%. The projections are included in the Focus Bulletin. Here’s the complete of the report (PDF – 778 kB).
Market agents also increased expectations for the base interest rate from 10.25% to 10.50% after the Copom (Monetary Policy Committee) meeting on Wednesday (May 8, 2024). Although the monetary authority signaled a cut of 0.5 percentage points at this month’s meeting, analysts estimate that the reduction will be smaller.
One of the reasons is the review of the fiscal target made by the federal government. The Ministry of Finance changed the 2025 and 2026 objectives and allowed a worsening in the trajectory of the government’s primary result.
The Focus Bulletin did not show a change in analysts’ projection for the 2025 Selic. The market is still betting on a rate of 9% at the end of next year.
Inflation
Analysts reduced the median for IPCA (Broad National Consumer Price Index) projections from 3.73% to 3.72%, which measures the country’s official inflation. The level is within the tolerance range determined by the CMN (National Monetary Council).
The inflation target is 3%, with permission to go up to 4.5% in 2024. For 2025, estimates have risen from 3.60% to 3.64%. The inflation target is the same as this year.
Financial market analysts revised the estimate for this year’s GDP (Gross Domestic Product) growth from 2.02% to 2.05%. Brazil grew 2.9% in 2023.
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