Focus Bulletin: Selic on the finish of 2023 goes from 11.75% to 12.00% per 12 months

Focus Bulletin: Selic on the finish of 2023 goes from 11.75% to 12.00% per 12 months

Currently, the focus of monetary policy is on the years 2023 and 2024. But the BC has emphasized the horizon of six quarters ahead, currently the second quarter of 2024

With the deterioration of inflation expectations in the relevant horizon of the Monetary Policy Committee (Copom) of the Central Bank, the financial market raised the projection for the Selic rate at the end of 2023 in Focus Bulletin. The median rose from 11.75% to 12.00%, against 11.50% a month ago. For 2024, in turn, the projection remained at 9.00%, from 8.25% four weeks ago.

Considering only the 70 responses from the last five working days, the median for the end of 2023 also continued to rise, from 12 00% to 12.25%.

At the Monetary Policy Committee (Copom) this month, the BC maintained the Selic rate at 13.75% per annum for the third consecutive meeting. The monetary authority also reinforced the fiscal warning, citing that there is “high” uncertainty about the future of the framework for public accounts.

Afterwards, at the press conference for the Quarterly Inflation Report (RTI), BC president Roberto Campos Neto indicated that the monetary authority would look into the impact on inflation expectations of the market’s greater “fiscal sensitivity”.

By the end of 2025, according to Boletim Focus, the median for the Selic did not remain at 8.00%, the same percentage as four weeks earlier.

IPCA for 2023 rises from 5.17% to 5.23%

In the Bulletin Focus published on the morning of this Monday, 26th, the medians for the inflation 2023 and 2024, years in the Copom’s sights, rose to 5.23%, above the target ceiling (4.75%), and 3.60%, moving away from the central target (3.00%), respectively . Indicating broader discouragement, the projection for the 2025 IPCA advanced for the third week in a row, now from 3.10% to 3.20%, from 3.00% four weeks earlier.

In the case of 2022, in turn, the estimate for the rise in the IPCA cooled from 5.76% to 5.64%, from 5.91% a month ago. Considering only the 93 estimates updated in the last five working days, the median for 2022 increased from 5.71% to 5.61%. For 2023, it rose from 5.12% to 5.24%, considering 92 updates in the period.

Focus medians for official inflation in 2022 and 2023 are well above the target ceiling for these horizons (5.00% and 4.75%, in that order), pointing to three years of non-compliance with the Bank’s main mandate Central. For 2024 and 2025, the numbers indicated by the Focus Bulletin are already above the center of the target, of 3.0% (margin from 1.50% to 4.50%).

Currently, the focus of monetary policy is on the years 2023 and 2024. But the BC has emphasized the horizon of six quarters ahead, currently the second quarter of 2024.

other months

Economists in the financial market significantly reduced the projection for the rise in the official inflation index for December in the Focus Bulletin. The median dropped from 0.60% to 0.48%. A month ago, it was 0.64%.

For the January IPCA, the estimate cooled from 0.55% to 0.52%, against 0.56% a month earlier. For February, the forecast for the indicator rose from 0.66% to 0.69%. It was 0.63% four weeks ago.

Expectations for smoothed inflation over the next 12 months increased from 5.25% to 5.27%, the same percentage expected a month ago.

GDP rise goes to 3.04%

The median for the high GDP in 2022 dropped marginally, from 3.05% to 3.04%, against 2.81% a month ago, while the estimate for GDP expansion in 2023 stood at 0.79%, against 0.70% a month earlier .

Considering only the 56 responses in the last five working days, the estimate for GDP at the end of 2022 increased from 3.02% to 3.05%. In the case of 2023, the median variation was from 0.79% to 0.78%.

As for 2024, the Focus Report showed a significant deterioration in the GDP growth projection, from 1.67% to 1.50%. For 2025, the median also dropped, from 2.00% to 1.90%. Four weeks ago, rates were 1.70% and 2.00%, in that order.

Exchange rate for 2023 goes to BRL 5.27

The scenario of american currency in 2023 again showed change this week in the Focus Market Report. The estimate for the exchange rate for next year went from R$5.26 to R$5.27, while for 2022 it remained at R$5.25. A month ago, the medians were R$5.27 and R$5.25, in that order. The annual exchange projection published in Focus is calculated based on the average for the rate in the month of December, and no longer on the value projected for the last working day of each year, as it was until 2020. With this, the BC hopes to bring greater precision for the exchange rate projections of the financial market.

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