MercoPress. South Atlantic News Agency

Brazil's Central Bank adjusts 2022 inflation projections by 0.01%

All projections are slightly above the BCB's National Monetary Council targets

Brazil's yearly inflation has been projected to reach 5.92% by the end of 2022, a 0.01% increase from last week's estimates, according to the Central Bank's (BCB) bulletin released Monday, while the Gross Domestic Product is expected to close at 3.05%.

The National Wide Consumer Price Index (IPCA) projection for 2023 also went up, from 5.02% to 5.08%, while figures for 2024 and 2025 stood at 3.5% and 3%, respectively.

The forecast for 2022 is above the ceiling of the inflation target set by the National Monetary Council of the Central Bank, which is 2% to 5%. Similarly, the market's projection for inflation in 2023 is also above the forecast ceiling.

The Focus bulletin also showed that financial institutions raised their projections for the Gross Domestic Product (GDP) - the sum of all goods and services produced in the country - for this year, from 2.81% to 3.05%.

For 2023, the expectation is that the Brazilian economy will grow by 0.75%, a forecast higher than the one made the week before (0.70%). For 2024 and 2025, the financial market projects GDP expansions of 1.71% and 2%, respectively.

Meanwhile, the basic interest rate (Selic) is expected to close the 2022 exercise at the current 13.75% a year, the same forecast as the week before. The last meetings of the Central Bank's Monetary Policy Committee (Copom), which sets the Selic rate, will be held Tuesday and Wednesday.

According to the Focus bulletin, the Selic for 2023 will be at 11.75%, up from last week's 11.5%. The estimate for 2024 also went up, from 8.25% last week to 8.50% this week. For 2025, the Selic forecast was maintained at 8% per year.

Regarding the exchange rate, the US dollar is expected to end the year at R$ 5.25, below the R$ 5.27 of last week. For 2023, the projection of R$ 5.25 was maintained. In the two following years, there was an increase in projections: from R$ 5.20 to R$ 5.23 in 2024 and from R$ 5.20 to R$ 5.21 in 2025.

(Source: Agencia Brasil)