Brazil economists raise inflation, rate forecasts after Lula reelection
TLT•Private-sector economists raised their forecasts for Brazil’s inflation and interest rates in the first weekly central bank poll since Luiz Inacio Lula da Silva’s reelection. They also lowered growth forecasts for 2026 and 2027 and forecast a weaker real.
1. Inflation and rates
The forecast for inflation at the end of 2027 rose to 4.76% from 4.34%. Economists raised their forecast for the benchmark interest rate to 13.50% from 13.25% for end-2026 and to 12.50% from 11.75% for end-2027.
2. Growth and currency
GDP growth forecasts for 2026 and 2027 fell to 1.76% and 1.2%, respectively, from 1.8% and 1.31%. The real was forecast at 5.34 per U.S. dollar at end-2026 and 5.40 at end-2027, compared with 5.05 and 5.15 in the previous survey. The central bank’s inflation target is 3%, plus or minus 1.5 percentage points; its next rate decision is due Wednesday, after five consecutive 25-basis-point cuts brought the Selic rate to 13.75%.
