Market increases growth projection and reduces inflation estimate

Projections for GDP growth increased and for inflation decreased
Projections for GDP growth increased and for inflation decreased| Photo: Marcelo Andrade/Gazeta do Povo/Arquivo

The financial market increased its projections for the growth of the Brazilian economy in 2022 for the fifth consecutive week and reduced those for inflation. Research carried out by the Central Bank of banks, brokerage firms and consulting firms shows that expectations for GDP growth are at 1.97% and for the IPCA at 7.15%.

The forecast for the Selic remained stable at 13.75% per year. But in the last five days, the market has signaled that the bullish cycle, which started in March last year, should close 2022 at 14%. This Tuesday and Wednesday, the Monetary Policy Committee (Copom) meets to define the new Selic rate.

For next year, projections point to higher inflation and lower growth. Inflation expectations have been rising for 17 weeks, indicating a 5.33% rise in prices. And those of GDP fell for the second week in a row, from 0.49% to 0.40%.

This scenario projection also influenced an increase in the Selic forecast for next year: last week, the financial market estimated an interest rate of 10.75% per year at the end of 2023. Now the forecast has increased to 11%.

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