Brazil's financial markets adjust 2025 projections for the worse

Monday, December 30th 2024 - 23:13 UTC

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Monday's issue of Brazil's Central Bank's (BCB) Focus Bulletin twitched last week's 2025 slightly for the worse, with higher inflation and a smaller Gross Domestic Product (GDP), Agencia Brasil reported. The study showed that the Broad Consumer Price Index (IPCA) should end 2025 at 4.96% from the 4.86% forecast last week. It was the 11th adjustment to the inflation projection and the ninth to the exchange rate between the local real and the US dollar. Read full article

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Brasileiro
I will save this article, as well as my projections below. At the end of each semester of 2025, I will do a partial analysis:

- dollar in 2025: R$5.80
- Selic rate in 2025: 9%
- GDP growth in 2025: 5%
- IPCA/Inflation in 2025: 4.2%

There are many justifications for my projections, but I will mention just two: trade in local currency with China and Russia is growing at triple-digit rates year after year and the financial market does not take this into account; next year's agricultural harvest will grow more than 10% compared to 2024.

Regarding the dollar, the government has no interest in keeping it below R$5.50, as this would reduce the amounts to be collected from the sale of US bonds in our possession.

Remember: the financial market projects a bad picture for the Brazilian economy in the hope that its prophecies will come true, which usually happened when the Central Bank was in the hands of the far right, which is not the case now, because starting tomorrow the presidency of the Central Bank will have someone who will work in harmony with the Ministry of Finance to anchor expectations.

Interestingly, all the pictures taken of our economy were good in 2024, and yet the financial market, centered on Faria Lima, sees a bad picture in the future. They never got anything right!

https://www.youtube.com/watch?v=GCUZ5VbavyM
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