New Central Bank forecast sees falling inflation as a relief for investors

The financial market forecast for inflation has recently attracted the attention of investors. Especially in Brazil, where the economy suffers from instabilities and political uncertainties. According to the latest Focus survey, released by the Central Bank, the forecast for inflation measured by the IPCA (Ample National Consumer Price Index) for this year dropped to 5,93%. Furthermore, for next year a rate of 3,75% is expected.

This drop in the inflation forecast can be seen as a relief for investors, who are looking for profitable and safe investments in the midst of instability in the economy. This is because high inflation can harm the profitability of several investments, especially those with fixed income. Proceed to understand better about.

Understand a little more about inflation, IPCA and INPC with the video below

A drop in inflation is a good sign that the economy can improve, but it still shouldn't be cause for celebration.

To better understand the impact of inflation on the economy and on investments, it is necessary to know that inflation is the general increase in the prices of goods and services in an economy. That is, the higher the inflation, the more expensive the cost of living becomes and the harder it is for people to maintain their purchasing power.

However, the drop in the inflation forecast is not a reason to settle, since we are still facing a scenario of instability and uncertainty. Furthermore, it is important to remember that inflation is only one of the factors that influence the investment performance.

The financial market, in turn, is an environment where investors trade various types of assets, such as stocks, government bonds, investment funds, among others. The financial market is influenced by several factors, such as the political and economic situation, changes in interest rates and, of course, inflation.

Financial market sees the positive impacts for investments and economy

The drop in the inflation forecast can have a positive impact on the financial market, since it can lead to a reduction in interest rates, making investments more attractive. This can be especially beneficial for investors looking for fixed income, such as government bonds.

However, it is important to remember that the financial market forecast for inflation is only an estimate, and that changes in the economy can lead to significant variations in this forecast. Therefore, it is essential to pay attention to the news and economic indicators, in order to make the best investment decisions.

In addition, it is important to diversify the investment portfolio, looking for assets with different degrees of risk and profitability. Investing in stocks, for example, can be a good option for those looking for higher returns.

Selic rate will have a predicted drop and should end the year 2023 with 12,75%

O Central Bank of Brazil uses the basic interest rate, also known as Selic, as its main instrument to reach the inflation target. Currently, the Selic is set at 13,75% per annum by the Monetary Policy Committee (Copom), remaining at this level since August last year. That is the highest level since January 2017, when it was also set at 13,75%.

For the financial market, the expectation is that the Selic will end the year at 12,75% per year, representing a drop in relation to the current level. In addition, forecasts for the end of 2024 and 2025 indicate a gradual decline in the basic interest rate. In this sense, estimates are 10% per year and 9% per year, respectively. For 2026, the expectation remains at 9% per year.

In short, the drop in the financial market's forecast for inflation can be seen as a positive sign for investors. However, it is important to be aware of changes in the economy and diversify your investment portfolio.