Brazil's financial market lowers 2025 inflation forecast to 4.72 pct

Alsharq Tribune-Otaify 

Brazil's financial market lowered its inflation forecast for 2025 from 4.80 percent to 4.72 percent, and maintained its 2026 forecast at 4.28 percent, bringing projections closer to the government's target ceiling, the Central Bank of Brazil said Monday.

According to the bank's weekly Focus survey of the country's leading financial institutions, four weeks ago, analysts expected an inflation rate of 4.83 percent for this year and 4.30 percent for 2026.

The gradual decline in inflation is approaching the official target ceiling of 4.5 percent annually, based on a 3 percent target rate with a margin of tolerance of 1.5 percentage points higher or lower.

Analysts' projections for the benchmark interest rate, called Selic, held steady for the sixteenth week in a row at 15 percent for 2025 and 12.25 percent for 2026.

Meanwhile, economists maintained their GDP growth forecast at 2.16 percent for 2025 and 1.80 percent for 2026.

In assessing Brazil's currency exchange market, where the real currently trades at 5.46 to the U.S. dollar, analysts maintained their forecast of 5.45 reals per U.S. dollar by the end of 2025 while revising their 2026 projection down from 5.53 to 5.50.

The trade balance (exports minus imports) is expected to see a surplus of 62 billion U.S. dollars in 2025 and 65.72 billion U.S. dollars in 2026.

Their forecast for foreign direct investment in Brazil remained unchanged at 70 billion U.S. dollars for both 2025 and 2026.