Brazil Small Increase In Inflation Expectation And Higher Selic Rate Path

Market analysts have increased inflation expectations for 2026-27 in Brazil, leading to an upward revision in the anticipated Selic policy rate path. Fiscal outlooks remain negative, with primary deficits expected through 2028.

Key Takeaways

• 1.Inflation expectations for 2026 rose to 5.11%, remaining above the target upper-limit, with long-term expectations also exceeding the 3.0% target.
• 2.The median market expectation for the Selic rate has been revised upward for 2026 and 2027.
• 3.Fiscal credibility remains low as the primary fiscal balance is expected to remain in deficit through 2028, contrary to government targets.

Table of Contents

• DETAILS