Focus Bulletin points to an optimistic scenario

The IPCA is considered the official index that measures Brazilian inflation.

For 2023, the inflation target, defined by the National Monetary Council (CMN) is 3.25%, with a tolerance interval of 1.5 percentage points (pp), upwards (4.75%) or downwards ( 1.75%).

The reduction in expected inflation measured by the IPCA is accompanied by an increase in GDP of 1.2% and a drop of approximately 1% in the dollar, compared to the same date of the previous week, quoted at R$5.15.

Even if the inflation expectation exceeds its target ceiling, it can be said that, together, the IPCA, GDP and Exchange indices released this Monday (22) indicate an improvement in the Brazilian economy in 2023.

The economy’s basic interest rate, selic, remains quoted at 12.50% – the same value as three weeks ago.

The IGP-M – the country’s main rent readjustment index – was revised to 1%, representing a sequence of weekly declines since the beginning of April 2023. Likewise, the IPCA Administrados, which represents services and products with defined readjustments by contracts or regulated by the public sector, fell for the 3rd consecutive week and stands at 9.50%.

According to the Central Bank: “The information comes from the Focus Report and summarizes the statistics calculated considering market expectations collected up to the Friday before its release. It is released every Monday. The report brings the graphic evolution and the weekly behavior of the projections for price indices, economic activity, exchange rate, Selic rate, among other indicators. The projections are from the market, not from the Central Bank.”

Data are from the Focus bulletin for the week of 05/22/2023.