Brazil’s Central Bank has finally published the latest figures from its Focus Report, a weekly survey among top-rated investment firms. Disclosure had been on hold for almost a month due to a strike among the bank’s workers, who demand better wages. With the stoppage suspended for two weeks, several figures are now being published once more.
As expected, the market increased its year-end inflation predictions from 6.86 percent a month ago to 7.65 percent now. Current estimates are almost double the government’s 3.5-percent target.
Higher inflation perspectives led the market to believe the Central Bank will continue raising interest rates. The year-end forecast for the Selic benchmark rate sits at 13.25 percent (Selic is currently 11.75 percent). Higher interest rates are the Central Bank’s main wager to cool off consumption and control inflationary pressure.
Estimates of GDP growth, meanwhile, went up from 0.5 to 0.65 percent over the last four weeks. But expectations for 2023 fell from 1.30 to 1 percent.