Financial market raises projection for Selic rate in 2023 to 12%.
The financial market also raised its inflation projection for 2023 from 5,17% to 5,23%, above the upper limit of the target of 4,75%.
Reuters - The market has raised its projection for the Selic rate in 2023, predicting that the benchmark interest rate will close the year at 12%, compared to 11,75% predicted a week ago, with the expectation that the Central Bank will have less room to reduce monetary tightening after closing this year with the rate at 13,75%.
The Central Bank's Focus report, compiling market analysts' expectations and released this Monday, also pointed to a marginal increase in inflation projections for next year, to 5,23%, from 5,17% previously – above the 2023 target ceiling of 4,75%. The projection for administered prices in the period increased to 6,53%, from 6,23% previously.
For 2024, the IPCA (Brazilian consumer price index) expectation has increased to 3,60%, compared to 3,50% a week ago.
The projections shifted after the release last week of the National Consumer Price Index-15 (IPCA-15) for December, which rose 0,52%, in line with expectations, and accumulated a 12-month increase of 5,90%.
Just last week, the National Congress enacted the Transition Amendment, which authorized an increase in the spending ceiling next year by 145 billion reais. Market analysts fear that the fiscal stimulus could hinder inflation control.
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