São Paulo survey: Brazil economists raise inflation and rate forecasts after Lula reelection

Reuters reported on November 3 that private-sector economists raised their forecasts for Brazil's inflation and interest rates in the central bank's first weekly Focus survey since left-wing President Luiz Inacio Lula da Silva's reelection on October 25. The forecast for inflation at the end of 2027 rose to 4.76% from 4.34%, while expectations for the benchmark Selic rate increased to 13.50% from 13.25% for end-2026 and to 12.50% from 11.75% for end-2027. Brazil's central bank has an inflation target of 3%, plus or minus 1.5 percentage points. (Cover photo is a file photo of São Paulo.)

Growth forecasts cut, real seen weaker; rate decision due Wednesday

The same survey cut GDP growth forecasts to 1.76% from 1.8% for 2026 and to 1.2% from 1.31% for 2027, and saw a weaker real, at 5.34 per US dollar at the end of 2026 compared with 5.05 previously, and 5.40 at the end of 2027 compared with 5.15. The central bank's board announces its next interest-rate decision on November 4, after five straight 25-basis-point cuts that brought the Selic rate to 13.75%. These figures are the median forecasts of surveyed economists, not commitments by the central bank, and the actual decision is still to come.