Brazil economists raise inflation, rate forecasts after Lula reelection
TLT•Private-sector economists raised Brazil’s inflation forecast to 4.76% from 4.34% and lifted their Selic rate forecasts to 13.50% for end-2026 and 12.50% for end-2027.
1. Forecasts rise
In the first weekly central bank survey since President Luiz Inacio Lula da Silva’s reelection, private-sector economists raised their forecasts for Brazil’s inflation and interest rates. The surprise result on October 25 triggered a sharp selloff in Brazilian assets.
2. Rate decision ahead
The forecast for the benchmark Selic rate rose to 13.50% from 13.25% for end-2026, and to 12.50% from 11.75% for end-2027. Brazil’s central bank has an inflation target of 3%, plus or minus 1.5 percentage points, and its board is set to announce its next rate decision on Wednesday after five straight 25-basis-point cuts brought the rate to 13.75%.
