Among top-rated investment firms surveyed by the Central Bank, the median forecast for the Selic benchmark interest rate went from 11.75 to 12.25 percent this week. Meanwhile, projections for consumer price index IPCA rose from 5.44 to 5.5 percent.
Since March of last year, Brazil has embarked on the world’s strictest monetary tightening process — jacking up interest rates from 2 to 10.75 percent. However, inflation has spread throughout multiple sectors and has not slowed down at the pace the government had hoped.
Amid high inflation and unemployment, sluggish industrial performance, and a presidential election set to be the most polarized in democratic times, markets predict a GDP growth rate of just 0.3 percent, much lower than the government’s and Central Bank’s forecasts, of 2.1 and 1 percent, respectively.