Brazil's financial market cuts 2025 inflation forecast

Alsharq Tribune-AFP 

Brazil's financial market lowered its inflation forecast for 2025 from 5.17 percent to 5.1 percent, marking eight weeks of downward adjustment in a row, the country's central bank said Monday.

The inflation forecast for 2026 was reduced from 4.5 to 4.45 percent, the bank added.

According to the bank's weekly Focus survey of Brazil's top financial institutions, the government's restrictive monetary policy has yielded results, since analysts forecast an inflation of 5.24 percent for 2025 four weeks ago.

The central bank has set an inflation target of 3 percent, with a tolerance range of plus or minus 1.5 percentage points.

Analysts' projections for the benchmark Selic interest rate remained unchanged at 15 percent for 2025 and 12.5 percent for 2026.

Regarding Brazil's economic growth, the forecast for this year remained steady at 2.23 percent, while the projection for next year decreased from 1.89 percent to 1.88 percent.

The trade balance forecast remained at an expected surplus of 69.25 billion U.S. dollars in 2025 and 75.2 billion dollars in 2026.

Foreign direct investment in Brazil was projected to remain at 70 billion dollars for both 2025 and 2026.