Brazil's market trims 2026 inflation forecast to 5.30%

The Central Bank’s weekly Focus bulletin released on Monday, 6 July 2026, showed the market’s median projection for the IPCA inflation index falling to 5.30% for 2026, down from 5.33% the week before. It is the first reduction after 16 consecutive weeks of steady or rising estimates, but the forecast remains above the 3% target set by the Conselho Monetário Nacional, which allows a 1.5‑4.5 percentage‑point tolerance band.

Projections for the next years show a slight rise to 4.18% for 2027, while the 12‑month‑ahead averages are held at 3.7% for 2028 and 3.5% for 2029. The market kept the Selic rate expectation at 14% for the end of 2026, implying another modest cut from the current 14.25%. The outlook for the benchmark rate stays at 12% for 2027, 10.5% for 2028 and 10% for 2029. The next Copom meeting is scheduled for 4‑5 August.

The projected GDP growth remains at 1.99% for 2026, with a marginal increase to 1.69% for 2027 and a stable 2% for both 2028 and 2029. The exchange‑rate forecast holds the dollar at R$ 5.20 in 2026, rising to R$ 5.58 in 2027, then falling to R$ 5.35 in 2028 and staying around R$ 5.40 in 2029.