Brazil Reduces 2025 Inflation Outlook to 5.25 Percent
(MENAFN) Brazil’s Central Bank announced Monday that financial markets have reduced their inflation estimate for 2025, signaling the continuing effects of aggressive monetary policy. The expected inflation rate was revised down from 5.44% to 5.25%, while the 2026 forecast remains unchanged at 4.50%.
The figures stem from the Central Bank’s weekly Focus survey, which compiles data from top financial institutions across the country. Despite the downward revision, the new projection still overshoots the official inflation target of 3%, which allows for a 1.5 percentage point margin of error in either direction.
Meanwhile, expectations for Brazil’s benchmark Selic interest rate held firm at 14.75% for the close of this year and 12.50% by the end of 2025.
On the growth front, economists slightly raised their outlook for the nation’s GDP. Projections for 2024 inched up from 2.18% to 2.20%, while the 2025 estimate moved from 1.81% to 1.83%.
The Brazilian real, which currently exchanges at 5.51 against the U.S. dollar, is forecasted to weaken further—reaching 5.77 by the end of 2025 and 5.80 by the end of 2026.
The country’s trade surplus is expected to remain robust, with analysts forecasting a positive balance of $74 billion this year and $78 billion next year.
Additionally, foreign direct investment is projected to hold steady, with $70 billion expected for both 2025 and 2026.
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