Brazil central bank sees inflation near target at key horizon, trims growth outlook
EWZ•Brazil’s central bank projected inflation at 3.1% through early 2029 and lowered its 2026 growth forecast to 1.8% from 2.0%, while forecasting 1.4% growth in 2027.
1. Inflation projections
The central bank projected annual inflation at 3.1% in the second quarter of 2028, the key horizon for its November rate decision, and at the same level through the first quarter of 2029. The projections are likely to bolster market bets on another rate cut this year, after the bank lowered its benchmark Selic rate by 25 basis points to 13.75% last week.
2. Growth outlook
The bank lowered its 2026 economic growth forecast to 1.8% from 2.0% and projected GDP growth of 1.4% in 2027. It cited weaker-than-expected activity indicators for the third quarter and a less favorable composition of second-quarter growth, which was concentrated in agriculture and extractive industries.
