inflation of financial markets projects from 4.01% to 2019

Consumer inflation is expected to remain at 3.69% this year, but is expected to reach 4.01% in 2019. This is the forecast for the National Price Index. to the large consumer (IPCA) established by the financial institutions consulted weekly by the Central Bank (BC). The Focus newsletter is published on Monday in Brasilia

Last week, the forecast for 2018 was also 3.69% and 4.03% for the following year. Estimates are below the center of the target that the recipient country must pursue. For this year, the target center is 4.5%, with a lower limit of 3% and an upper limit of 6%. To achieve the goal of inflation, the Central Bank uses the basic interest rate as an instrument (see below). Selic rate

Selic rate

According to the financial market, the Selic should end in 2019 at 7.13% per year (median expectations, which does not take into account the extremes of the forecasts). ). The previous forecast was 7.25% per year.

When the Monetary Policy Committee (Copom) raises Selic's rate, the goal is to contain the sharply rising demand, which has price effects as interest rates are higher. high.

When Copom reduces Selic, credit tends to become cheaper, with an incentive for production and consumption, thus reducing the control of inflation. 19659002] The maintenance of the basic interest rate indicates that the Copom believes that the previous amendments are sufficient to achieve the goal of inflation.

Economic Activity

The projection for the expansion of Gross Domestic Product (GDP) – the sum of all goods and services produced in the country – represents 1.3% this year and has gone from 2.53% to 2.55% in 2019. For the years 2020 and 2021, the estimate is 2.50%