Home News Brazil Analysts See Higher Key Rate and Inflation Through 2027

Brazil Analysts See Higher Key Rate and Inflation Through 2027

December 10, 2024

by Maria Eloisa Capurro
Yahoo! Finance

(Bloomberg) — Brazil economists lifted their estimates for inflation and borrowing costs through 2027 as investors bet the central bank will turn more aggressive on interest rate hikes at its meeting this week.

The benchmark Selic will rise to 12% at Wednesday’s policy decision, up from the prior estimate 11.75%, according to a weekly central bank survey of economists published Monday. Analysts also lifted their forecasts for the key rate at the end of next year to 13.5%, from 12.63% before.

Borrowing cost cuts are only expected to start in 2026, when the Selic is seen at 11% before falling to 10% in 2027.

Central bankers led by Roberto Campos Neto are widely expected to extend their tightening cycle from the current level of 11.25% while also reinforcing their commitment to haul inflation to the 3% target.

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