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.
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