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The Central Bank released its forecasts for the value of the dollar in 2025, highlighting economic trends and factors that could impact the US currency in the Brazilian market.
The financial market has once again revised upwards its expectations for interest rates, inflation and the dollar for next year, according to the Central Bank's (BC) Focus bulletin. This was the first report after the details of the fiscal package and the income tax reform, presented by the federal government last week.
Interest
The projection for the basic interest rate (Selic) in 2025 rose to 12,63%, above the 12,25% forecast last week. This was the third consecutive increase in estimates for next year. For 2024, the market maintained the forecast at 11,75%, while the current Selic is at 11,25% per year.
The last meeting of the BC's Monetary Policy Committee (Copom) in 2024 will take place on December 10th and 11th. Analysts expect the meeting to end with a further 0,5 percentage point hike.
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Inflation
Forecasts for the Broad Consumer Price Index (IPCA), the official inflation indicator, also rose. For 2025, the market projects an increase of 4,4%, compared to 4,34% the previous week. For 2024, the estimate was raised from 4,63% to 4,71%.
This was the seventh consecutive increase in projections for the IPCA in 2025. The new estimates bring inflation closer to the ceiling of the target established by the BC, of 3% with a tolerance margin of 1,5 percentage points.
Dollar
The market also adjusted its forecast for the dollar next year, raising it to R$5,60, compared to R$5,55 the previous week. For the end of 2024, the projection remained at R$5,70.
The dollar ended November at R$6, marking a 3,8% increase in the month, reflecting the negative reactions to the government's announcements. This level reinforces the pressure on the Brazilian currency, keeping the dollar close to its highest historical levels.
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On the other hand, the Focus bulletin showed a slight improvement in the economic growth forecast. The Gross Domestic Product (GDP) for 2024 is expected to close with an expansion of 3,22%, while the estimate for 2025 was maintained at 1,95%.
These data show a scenario of economic challenges for Brazil, with inflation and interest rates rising and the exchange rate under pressure. Market expectations will continue to be influenced by the effectiveness of the government's fiscal and monetary policies.
