Published Monday, 19 October, 8:01 a.m. ET · Source: Banco Central do Brasil
Key Facts
—The number. Economists expect Brazil’s inflation to end 2026 at 5.22%, unchanged from a week earlier and 0.72 percentage points above the 4.5% ceiling of the official target range.
—What changed. The 2027 inflation forecast edged up from 4.30% to 4.32%, while the 2026 growth forecast slipped from 1.85% to 1.83%.
—Market expectation. Economists see the dollar at R$5.13 at the end of 2026 (the real at about 19.5 US cents), down from R$5.15 a week ago, and the Selic interest rate at 13.25%.
—Prediction markets. Polymarket puts Brazil’s 2026 inflation in the 5.00% to 5.49% range at 73.1% (19 October 2026, 8:00 a.m. ET).
—Still unknown. Whether the September inflation rate of 4.58% over 12 months keeps rising; the next reading, a mid-month index, arrives on 23 October.
Economists polled by Brazil’s central bank kept their 2026 inflation forecast at 5.22% in the weekly Focus survey published on Monday 19 October, well above the 4.5% ceiling of the official target. They trimmed their growth forecast for Brazil’s economy to 1.83% and raised their 2027 inflation forecast to 4.32%.
The Focus survey is the central bank’s weekly poll of market economists, published every Monday morning. For a US investor it is the best single read on the outlook for Brazil’s inflation, interest rates and currency.
What the Economists Now Expect
The table shows the median forecast in the 19 October survey against the previous week’s. Medians are the middle answer of all economists polled, which keeps a few extreme views from distorting the picture.
| Forecast | Previous survey (13 Oct) | 19 Oct survey |
|---|---|---|
| Inflation 2026 | 5.22% | 5.22% |
| Inflation 2027 | 4.30% | 4.32% |
| GDP growth 2026 | 1.85% | 1.83% |
| GDP growth 2027 | 1.40% | 1.32% |
| Dollar, end of 2026 | R$5.15 | R$5.13 |
| Dollar, end of 2027 | R$5.26 | R$5.22 |
| Selic rate, end of 2026 | 13.25% | 13.25% |
| Selic rate, end of 2027 | 12.00% | 12.00% |
Four weeks ago the 2026 inflation forecast was 4.92%, so it has moved up by 0.30 points since then. The central bank targets 3% inflation and tolerates a range of 1.5 points either side, which makes 4.5% the ceiling.
Why Prices Are Still the Story
Inflation measured by the IPCA, Brazil’s official consumer price index, rose 0.82% in September and reached 4.58% over 12 months, according to IBGE, the national statistics agency. That is above the 4.5% ceiling, and economists expect it to rise to 5.22% by December.
The Selic rate is the central bank’s main tool against inflation. Its benchmark Selic rate stands at 13.75%, and economists expect only 0.50 points of further cuts by December, to 13.25%.
What It Means for US Readers
A high Selic rate keeps Brazilian bonds attractive to dollar investors, but it raises borrowing costs for companies. That matters for US-listed names such as Petrobras (PBR), Vale (VALE), Itaú (ITUB) and Nubank (NU), and for the iShares MSCI Brazil ETF (EWZ), which our guide to Brazilian stocks covers.
Economists expect a slightly weaker real than today’s market rate of about R$5.07 per dollar, based on RT data on Monday morning. For a traveller, R$1,000 costs about US$197 at that rate and would cost about US$195 at R$5.13.
What Is Not Known
A median forecast is not a decision, and economists often revise their numbers after each data release. The survey also cannot say how the 25 October presidential runoff will affect the real or the central bank’s plans.
What Comes Next
- Friday 23 October: IBGE publishes the mid-month inflation index for October.
- Sunday 25 October: the presidential runoff, which will shape policy and the real.
- Wednesday 4 November: the central bank’s rate committee announces its next interest-rate decision.
What Prediction Markets Say
- Polymarket, “Brazil Annual Inflation 2026”: 5.00% to 5.49% at 73.1%, 4.50% to 4.99% at 10.5%, 6.00% to 6.49% at 3.9% (US$169,393 traded).
Prices as of 8:00 a.m. ET, 19 October 2026. Prices are bets, not polls; Kalshi is regulated in the US by the CFTC.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
Our Brazil economy 2026 guide puts inflation together with interest rates, jobs, debt and trade in one place.
Sources
Banco Central do Brasil, Focus survey of 19 October 2026 · IBGE, IPCA consumer prices · Banco Central do Brasil, inflation target · Polymarket
This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
Brazil runoff, Sunday, October 25: When is the Brazil runoff election. Latest: Brazil runoff polls, Flávio 51%, Lula 49%.
Frequently Asked Questions
What is Brazil’s inflation forecast for 2026?
Economists in the central bank’s 19 October Focus survey expect inflation of 5.22% in 2026. That is 0.72 percentage points above the 4.5% ceiling of the official target range.
How does this affect the real?
Economists expect the dollar at R$5.13 at the end of 2026, slightly weaker for the real than the market rate of about R$5.07. The 25 October runoff adds uncertainty to that outlook.
What is the Focus survey?
The Focus survey is the Banco Central do Brasil’s weekly poll of market economists. It is published every Monday and shows median forecasts for inflation, growth, the dollar and the Selic rate.
What interest rate do economists expect for Brazil?
Economists expect the Selic rate at 13.25% at the end of 2026 and 12.00% at the end of 2027. The rate stands at 13.75% today.