Financial market raises forecasts for inflation and GDP in 2021 – Focus report

RIO DE JANEIRO, BRAZIL – The financial market has again revised upward its forecasts for the growth of the Brazilian economy and inflation this year, according to the Focus report published Monday June 28 by the Central Bank (BC).

Estimates for inflation in 2021 rose for the twelfth consecutive week, this time from an average 5.90% to 5.97%. For 2022, the projections remained at a high of 3.78% of the Nationwide Consumer Price Index (IPCA).

Amid a movement of revisions by major financial market institutions that have raised their forecasts for Brazilian gross domestic product (GDP) growth, the average Focus forecast for the expansion of activity rose from 5% to 5.05% in 2021, for the 10th consecutive week.

Growth of 2.11% is expected in 2022, up from 2.10% in the previous survey.

Regarding the benchmark interest rate, after two weeks of increased expectations, economists maintained the forecast that SELIC will be 6.50% at the end of 2021 and remain stable until December 2022.

In addition, as in the previous week, the market expects another 0.75 percentage point increase in the next meeting of the Monetary Policy Committee (Copom) in August.

Finally, regarding expectations for the exchange rate, bets on the dollar remained at R$ 5.10 at year-end 2021 and R$ 5.20 in December 2022.

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