Market raises projection for inflation, interest and dollar in 2026

The financial market raised projections for the basic interest rate (Selic), inflation and the dollar this year and reduced, for the third consecutive week, the economy's growth estimate.

The data is contained in the Focus Bulletin, a weekly report released by the Central Bank with financial market projections for inflation, exchange rate, Selic rate, among other indicators.

In this first bulletin after the results of the presidential elections, the projection for the basic interest rate (Selic) at the end of 2026 went from 13.25% last week to 13.5% – the same level estimated four weeks ago.

Currently, the Selic is at 13.75%, which indicates that the market is still waiting for a cut of 0.25 percentage points by the end of the year.

For 2027 and 2028, projections for Selic are at 12.5% ​​and 11%, respectively.

Selic is the Central Bank's main instrument for controlling inflation. Higher interest rates make credit more expensive and help reduce demand and prices, but they can slow down economic activity.

Lower interest rates stimulate consumption and investments, favoring growth, but can put pressure on inflation.

Inflation

Used to measure the country's official inflation, the Broad National Consumer Price Index (IPCA) is also among the Focus Bulletin's projections.

Financial market estimates for 2026 rose from 5.19% a week ago to 5.22%. Four weeks ago, the projection for the IPCA was 5.01%.

For 2027, the market projects inflation of 4.76%. For 2028, the expectation is 4%.

The official inflation preview was 0.32% in October, according to the Brazilian Institute of Geography and Statistics (IBGE). As a result, the IPCA-15 accumulated an increase of 4.62% in 12 months, above the inflation target ceiling.

The deceleration in relation to September (0.70%) was mainly influenced by the drop in residential electricity, following the adoption of the green tariff flag in October.

The biggest upward pressure came from food products, with emphasis on tomatoes (24.54%), onions (13.63%), potatoes (10.96%) and rice (5.80%).

Economy

Regarding the Gross Domestic Product (GDP), the sum of goods and services produced in the country, the financial market reduced, for the third consecutive week, projections for 2026.

A week ago, the market projected GDP growth of 1.8% in 2026. In the current edition of the Focus Bulletin, this estimate fell to 1.76%. For 2027, the expectation is for growth of 1.2% and for 2028, 1.8%.

Exchange

Projections for the dollar exchange rate at the end of the year rose from R$5.05, a week ago, to R$5.34.

The market estimates that, in 2027, the North American currency will end the year quoted at R$5.40. For 2028, the projection remains at R$5.40.