Financial market analysts have once again revised upwards their inflation expectations for 2026, indicating a more challenging scenario for the Brazilian economy. According to the Focus Report, released this Monday (4) by the Central Bank, the projection for the Broad Consumer Price Index rose to 4,89%, exceeding the ceiling of the target set by the National Monetary Council.
At the same time, estimates for economic growth remain stable. Gross Domestic Product is expected to advance 1,85% in 2026, repeating the forecast from the previous week, which reinforces the view of a moderately growing economy.
Inflation above the established limit.
The projected 4,89% for the IPCA (Brazilian consumer price index) places inflation above the tolerance range of the target, set at 3%, with a margin of 1,5 percentage points above or below. In practice, this means that the index should be between 1,5% and 4,5% to be considered within the target.
Despite pressure on future expectations, the most recent data still shows inflation within the limit. In March, the index rose 0,88%, accumulating a 4,14% increase over 12 months. In 2025, inflation closed at 4,26%, above the center of the target, but still within the permitted range.
The market is now awaiting the release of April's results, scheduled for May 12th, which may influence further revisions to projections.
For 2027, the inflation expectation was maintained at 4%, still above the center of the target.
Economic growth remains subdued.
In the area of economic activity, the Focus Report indicates stability for 2026, with GDP growth estimated at 1,85%. For subsequent years, there is a slight slowdown: the forecast for 2027 was reduced from 1,80% to 1,75%, while the estimate for 2028 remains at 2%.
The projected performance contrasts with the 2025 result, when the Brazilian economy grew by 2,3%, according to IBGE data.
Other institutions have also presented similar projections. The Institute for Applied Economic Research estimates growth of 1,6% for 2026, while the federal government is working with a more optimistic expectation of 2,3%. The International Monetary Fund projects an expansion of 1,9% and points to the possibility of Brazil returning to its position as the 10th largest economy in the world.
Interest rates remain high in response to inflation.
The scenario of high inflation keeps expectations for the benchmark interest rate at a high level. The projection for the Selic rate at the end of 2026 was maintained at 13% per year.
For the following years, the market expects a gradual downward trend, with a rate of 11% in 2027 and 10% in 2028.
At the last meeting of the Monetary Policy Committee, held at the end of April, the Selic rate was reduced from 14,75% to 14,5%. The next meeting of the committee is scheduled for June.
The base interest rate is the Central Bank's main instrument for controlling inflation, directly influencing the cost of credit and the pace of economic activity.
The dollar remains stable in projections.
Estimates for the exchange rate remain relatively stable. For 2026, the dollar is expected to end the year quoted at R$ 5,25, according to Focus.
For 2027, there was a slight downward revision, from R$ 5,35 to R$ 5,30. For 2028, the projection fell marginally, from R$ 5,40 to R$ 5,39.
Market expectations guide decisions.
The Focus Report compiles weekly expectations from financial institutions and serves as a benchmark for analyzing the country's economic outlook. The data reflects market perceptions on inflation, growth, interest rates, and exchange rates, and is closely monitored by investors and policymakers.
Given an environment of persistent inflation and moderate growth, the challenge for economic policy will be to balance price control with the recovery of activity, in a context of internal and external uncertainties.
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