The latest Focus Report from the Central Bank reveals a significant increase in market projections for Brazil’s benchmark interest rate in 2024. Analysts’ median estimate for the Selic rate has risen to 10 percent by the end of the year, marking the fourth consecutive week of upward revisions.
Projections for 2025, 2026, and 2027 have also seen adjustments, with inflation estimates surpassing the 3 percent target. Last week, the Central Bank’s decision to cut the interest rate by 0.25 points further reflected concerns about Brazil’s fiscal stance and the global economic environment.
The uncertainty surrounding economic expectations has led to a de-anchoring effect on projections. Despite potential future rate cuts, analysts predict a slowdown in economic activity, resulting in a slight GDP adjustment for 2024. The cautious monetary policy approach adopted by the Central Bank aims to stabilize market expectations amid evolving conditions.
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