Financial market economists now expect Brazil's inflation to end 2026 at 4.9%, down from 5% a week earlier. The estimate was published on Monday (14) in the Boletim Focus, a weekly Central Bank survey of more than 100 financial institutions, and marks the third straight weekly cut. For households, 4.9% means a grocery basket that cost 100 reais at the end of 2025 should cost about 104.90 reais by this December.
The relief is still limited against the Central Bank's own goal: the official target is 3%, with a tolerance band of 1.5% to 4.5%, and the projected 4.9% remains above the ceiling. According to Folha de S.Paulo, it is the first time since May 18 that the Focus survey puts the index below 5%. The estimate peaked at 5.33% on June 22 and has fallen ever since.
In brief: the Boletim Focus is a weekly Central Bank poll of banks and consultancies, published as the median of their bets on inflation, interest rates, the exchange rate and growth. It is the most closely watched gauge of what markets expect from the Brazilian economy.
A slower economy
The growth forecast also fell: economists now see GDP (the sum of all goods and services produced in the country) expanding 1.89% in 2026, down from 1.93%, the lowest reading since May 25, according to Folha. The economy grew 2.3% in 2025, according to the national statistics agency IBGE, and a weaker pace usually reaches households as fewer job openings and smaller raises. For 2027, the estimate fell from 1.5% to 1.45%, and for 2028 from 1.96% to 1.87%, according to InfoMoney.
The lower inflation forecast has everyday explanations: electricity bills and the gas pump. Brazil's benchmark consumer price index (IPCA, measured by the IBGE) fell 0.32% in August, the agency reported on Friday (11), helped by cheaper power after a temporary bonus from the Itaipu dam, plus declines in airfares, some foods and fuels. The improvement comes despite the war in the Middle East keeping oil expensive, and after the government cut fuel taxes and kept subsidies in place last week, according to news site G1.
Rates and the currency
On Brazil's benchmark interest rate, the Selic, now at 14% a year after four cuts in 2026, economists expect one more reduction of a quarter point, to 13.75%, at this week's meeting of the Copom, the Central Bank committee that sets the rate. According to Folha, it should be the last cut of the year. The Selic shapes how much Brazilians pay on car loans and credit card debt, so the relief for borrowers remains small.
For the following years, the market sees the Selic at 12% by the end of 2027, 10.5% in 2028 and 10% in 2029. The dollar is expected to end 2026 at 5.20 reais, a forecast held for 13 straight weeks, with the end-2027 estimate down from 5.30 to 5.28 reais. Inflation projections for 2028 and 2029 were unchanged at 3.8% and 3.5%, while the 2027 figure edged up from 4.29% to 4.30%.
The Central Bank has said that slower growth is part of its strategy to contain inflation, since a cooler economy reduces pressure on prices. In an election year, however, the government has been stimulating consumption and cutting taxes, which, according to G1, makes that control harder.