Financial market economists cut their 2026 inflation forecast for Brazil to 5%, from 5.01% the week before, in the Focus survey released on Tuesday (8) by the Central Bank. In everyday terms, the grocery cart that costs 100 reais today is expected to cost about 105 by the end of the year. The estimate tracks the IPCA, the index that measures Brazil's official inflation.

The number still sits above the government's commitment. The inflation target, set by the National Monetary Council, is 3%, with a ceiling of 4.5% and a floor of 1.5%. For 2027, the forecast edged up from 4.28% to 4.29%.

GDP and interest rates

In the same survey, the growth estimate for the Brazilian economy in 2026 rose from 1.92% to 1.93%. According to InfoMoney, it was the first upward revision in more than two months. The pace is modest next to the 2.3% expansion of 2025, the fifth straight year of growth.

In brief: the Focus bulletin is a weekly Central Bank survey of more than 100 financial institutions, from banks to consultancies. The published figures are the median of their forecasts for inflation, interest rates, GDP and the exchange rate. The bank uses it to track market expectations.

Brazil's benchmark interest rate, the Selic, stands at 14% a year after four straight cuts by the Copom, the Central Bank committee that sets rates. Until March, it sat at 15%, the highest level in nearly 20 years. Markets expect it to fall to 13.75% by the end of this year and to 12% in 2027; in the meantime, loans, financing and installment plans stay expensive.

The next test comes on Friday (11), when the IBGE, Brazil's statistics agency, releases August inflation. In July, prices were up 4.44% over 12 months, back inside the official target band. The market also expects the dollar to end the year at 5.20 reais.