Market raises inflation expectations and cuts GDP growth for 2021

Headquarters of the Central Bank in Brasilia | Photo: Marcello Casal Jr / Agência Brasil

The financial market has again raised its inflation forecast for this year from 7.05% to 7.11%. This is the 20th increase followed by the estimate, published on Monday (23) in the Focus Bulletin of the Central Bank. For 2022, the forecast is that inflation will end the year at 3.93%. For 2023 and 2024, the forecasts are respectively 3.25% and 3%. The inflation estimate for 2021 is above the target set by the Central Bank of 3.75%.

Also according to the Focus Bulletin, the estimate of financial institutions consulted by the BC shows a reduction in the growth projection of the Brazilian economy this year from 5.28 to 5.27%. For 2022, the expectation for gross domestic product (GDP) is 2% growth. In 2023 and 2024, the financial market forecasts GDP growth of 2.5%.

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