Market predicts GDP of 2.24% this year

Four weeks ago, the expectation of the financial institutions consulted by the BC for the elaboration of the weekly report with the main economic indicators was that the year would end with a growth of 2.14% of the GDP. For 2024 and 2025, growth is expected to be 1.3% and 1.88%, respectively.

The financial market forecast for the National Consumer Price Index (IPCA), considered the country’s official inflation, remained stable at 4.95%. Four weeks ago, the expectation was that 2023 would close with an inflation of 5.12%. For 2024 and 2025, inflation projected by the market is 3.92% and 3.55%, respectively.

The projection for 2023 inflation remains above the target for the year, set at 3.25% by the National Monetary Council (CMN). With a tolerance margin of 1.5 percentage points above or below, the target will be considered met if it fluctuates between 1.75% and 4.75%.

To reach the inflation target, the Central Bank uses the basic interest rate, the Selic, as its main instrument, set at 13.75% per year by the Monetary Policy Committee (Copom). The rate has been at that level since August last year and is the highest since January 2017.

Selic and exchange rate

Both the basic interest rate and the exchange rate remained stable, according to this week’s Focus bulletin. In the case of Selic, the expectation is that it closes the year with a rate of 12%. The same percentage was projected a week ago by the market. Four weeks ago, the expectation was that 2023 would close with a Selic rate of 12.25%. The Selic projection also remains stable for 2024 at 9.5% and 2025, 9%.

With regard to the exchange rate, the forecast is the same as it was four weeks ago, that the dollar will end the year at R$5. BRL 5.05 and BRL 5.15, respectively. This Monday, the dollar exchange rate, according to the Central Bank, is R$ 4.82.