Brazil inflation slowdown intensifies push for deeper Selic cuts

The July IPCA‑15 inflation pre‑estimate registered a 0.06% rise, the lowest monthly reading since July 2023, with the year‑to‑date figure at 3.51% and a 12‑month rate falling to 4.52%. The decline was driven by lower food and fuel prices, prompting the Confederação dos Trabalhadores (CTB) to demand a more aggressive reduction of the benchmark Selic rate, warning that the current level hampers development and employment.

Economist Camila Abdelmalack of Serasa Experian expects the Central Bank to continue trimming the Selic in small steps but notes that the cycle of cuts is approaching its end. She cites a supportive exchange‑rate environment, fiscal constraints, upcoming elections, high U.S. rates and heightened geopolitical volatility as factors that could limit further reductions.

Both analyses converge on the view that while another modest cut is plausible, broader structural reforms and financial education are needed to sustain lower interest rates and improve household and corporate credit conditions in Brazil.