Focus Bulletin: Market sees inflation at 8.9% and higher growth in 2022

Due to the strike, the Focus report had no new publications since May 2

More than a month after the last release of the Focus reportthe document published this Monday by the central bank (BC) points to inflation at 8.89% in 2022 and 4.39% in 2023.

The number is much higher than those projected by the market in the latest edition of Focus, published on May 2nd. At that time, the median of expectations was 7.89% this year and 4.1% in 2023.

This year’s inflation target is 3.5% with a tolerance interval of 1.5 percentage points (pp). In March, the BC had already admitted a high probability of noncompliance with the target. For 2023, the target is 3.25%, with a floor of 1.75% and a ceiling of 4.75%.

Due to the strike by BC servers, the Focus report was not published on four occasions during the month of May. As a result, market expectations were out of step since the beginning of last month.

For GDP growth, the market has updated its projections to 1.2% in 2022 and 0.76% next year. In the last edition of Focus, the projection of market agents for GDP was 0.7% in 2022 and 1% in 2023.

The expectation for the basic interest rate, the Selic, was 13.25% for the end of this year and 9.75% in 2023. At the beginning of the month, the market median was that the rate would end 2022 on 13, 25% per year and fall to 9.25% in 2023.

latest expectations

The BC’s disclosure on Monday was partial, several indicators ended up not being published, such as the longer projections, for 2024 and 2025, and other indices, such as the IGP-M, trade balance and primary result.

However, the BC released the median of the projections of the last five days, which brings a sign of how expectations may advance in the coming weeks. The main expectations consider the market projections of the last 30 days.

Taking into account the last 5 days, inflation would be a little higher, at 9% in 2022 and 4.5% in 2023, as well as GDP for this year, which reaches 1.5%. The growth for next year would be smaller, 0.47%.

Source: O Globo Agency