The inflation Brazilian economists expect for 2026 rose from 4.92% to 4.99% in the Focus survey released on Monday (28) by the country's central bank. At that pace, a 500-real grocery basket bought in January would cost about 525 reais by late December. It was the second straight weekly increase, according to Folha de S.Paulo.
In the same report, economists cut the 2026 growth forecast for GDP, the total value of goods and services produced in the country, from 1.88% to 1.86%. It was the third consecutive weekly reduction, and the lowest estimate since May. The pace is well below the 2.3% Brazil posted in 2025, according to official data from the IBGE, the national statistics agency.
What the Focus survey is
The Focus bulletin is a weekly central bank survey of more than 100 banks, brokerages and consulting firms. The bank publishes the median, the middle value, of their projections for inflation, growth, interest rates and the currency. Investors watch it as a preview of market thinking ahead of official data, and as a guide for the Copom, the committee that sets Brazil's benchmark interest rate.
The 4.99% forecast for the IPCA, Brazil's official consumer price index, sits above the 4.5% ceiling of the central bank's inflation target, whose center is 3%, with a tolerance band of 1.5 percentage point either way. The survey also sees 12-month inflation ending the year at 4.65%. For a worker earning 2,000 reais a month, 4.99% inflation erodes about 100 reais of purchasing power over the year.
What it means for interest rates
The benchmark rate, the Selic, stands at 13.75% a year after five cuts this year, according to G1. Even with inflation above the target ceiling, markets still expect one more cut, to 13.50% by the end of 2026, and project 12% for the end of 2027. The forecast for the exchange rate at year-end stayed at 5.20 reais per dollar.
The mix complicates the central bank's job: according to G1, the war in the Middle East is keeping oil expensive, and in an election year the government's efforts to stimulate the economy make inflation harder to control. For the years ahead, Focus projects inflation of 4.31% in 2027, 3.80% in 2028 and 3.50% in 2029, all still above the 3% goal. GDP growth of 1.41% is expected for 2027, pointing to weak growth next year as well.