The financial market forecast for the Broad National Consumer Price Index (IPCA) – considered the country’s official inflation rate – increased from 4.4% to 4.36% this year. The estimate was published in the Focus bulletin this Monday (15), a survey released weekly by the Central Bank (BC) with the expectations of financial institutions for the main economic indicators.
For 2026, the inflation projection varied from 4.16% to 4.1%. For 2027 and 2028, the forecasts are 3.8% and 3.5%, respectively .
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For the fifth consecutive week, the forecast was reduced, reaching the range of the inflation target that should be pursued by the Central Bank. Defined by the National Monetary Council (CMN), the target is 3%, with a tolerance range of 1.5 percentage points above or below. That is, the lower limit is 1.5% and the upper limit is 4.5% .
The rise in airfare prices caused November’s inflation to reach 0.18% . In October, the IPCA (Brazilian consumer price index) had been 0.09%.
With this result, the accumulated inflation over 12 months is 4.46%, within the CMN’s target .
Basic interest rates
To achieve the inflation target, the Central Bank uses the benchmark interest rate – the Selic rate – set at 15% per year by the Central Bank’s Monetary Policy Committee (Copom), as its main instrument. The decline in inflation and the economic slowdown led to the Selic rate being maintained for the fourth consecutive time .
The board gave no indication of when it should begin cutting interest rates. In a statement, the Central Bank informed that the current scenario is marked by great uncertainty, which requires caution in monetary policy, and that the Central Bank’s strategy is to maintain the Selic rate at this level for quite some time .
The rate is at its highest level since July 2006, when it was at 15.25% per year. After reaching 10.5% per year in May of last year, the rate began to rise in September 2024. The Selic rate reached 15% per year at the June meeting, and has been maintained at that level since then.
Market analysts estimate that the benchmark interest rate will fall to 12.13% per year by the end of 2026. For 2027 and 2028, the forecast is that the Selic rate will be reduced again to 10.5% per year and 9.5% per year, respectively .
When the Copom (Monetary Policy Committee) raises the Selic rate (Brazil’s benchmark interest rate), the goal is to curb heated demand; this has repercussions on prices because higher interest rates make credit more expensive and encourage saving. Thus, higher rates can also hinder economic expansion. Banks also consider other factors when setting interest rates charged to consumers, such as the risk of default, profit, and administrative expenses.
When the Selic rate is reduced, the tendency is for credit to become cheaper, incentivizing production and consumption, thus reducing control over inflation and stimulating economic activity .
GDP and exchange rate
In this edition of the Focus bulletin, financial institutions’ estimate for Brazilian economic growth this year remained at 2.25%.
For 2026, the projection for Gross Domestic Product (GDP, the sum of goods and services produced in the country) was 1.8%. For 2027 and 2028, the financial market estimates GDP growth of 1.83% and 2%, respectively .
Driven by expansions in services and industry, the Brazilian economy grew 0.4% in the second quarter of this year . In 2024, GDP closed with a 3.4% increase. This result represents the fourth consecutive year of growth, and the largest expansion since 2021, when GDP reached 4.8%.
The projected exchange rate for the dollar is R$ 5.40 by the end of this year. By the end of 2026, it is estimated that the US currency will be at R$ 5.50 .
