Inflation expectations drop for fifth straight week

The financial market reduced, this Monday (19), inflation expectations, measured by the Consumer Price Index (IPCA). The data appear in the Central Bank’s Focus Bulletin and refer to a comparison with the figures released a week ago. This time, the index is 5.12%, which represents a drop in relation to the previous index, of 5.42%. This is the fifth drop in a row of inflation expectations.

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) up or down. Therefore, the inflation expectation still remains above the target.

In relation to GDP, there is an increase in the projection for the 6th consecutive week, compared to the previous week, by 2.14%. The increase occurs in view of the release of the Gross Domestic Product result for the first quarter of 2023, up 1.9%.

The projection for the dollar has fallen since last week, mainly due to the improvement in the country risk assessment, released by S&P. The currency is quoted at R$ 5.00.

Even if the inflation expectation exceeds its target ceiling, it can be said that, together, the IPCA, GDP and Exchange indices. released this Monday (19), indicate an improvement in the Brazilian economy in 2023.