Financial market gets 95% of its economic forecasts wrong since 2021, survey shows.

247 - A survey carried out by UOL The study revealed that the financial market has been wrong in 95% of its forecasts about the Brazilian economy and the performance of the Stock Exchange since 2021. The study analyzed estimates made by economists, analysts, and specialists for indicators such as the Ibovespa, the Selic rate, GDP (Gross Domestic Product), the variation of the dollar, and inflation, measured by the IPCA (National Consumer Price Index). The data were collected from the first Focus bulletin of each year, published by the Central Bank, and from the "LatAm Fund Manager Survey" by Bank of America, which surveys fund managers who invest in Brazil.

The analysis covered the years 2021 to 2024, and the results show that, of 20 projections analyzed, only one proved correct: the prediction that the Ibovespa would perform well in 2022. In the other cases, the estimates failed to predict scenarios such as the increase in the Selic rate, the devaluation of the real against the dollar, and higher-than-expected inflation.

Predictions for 2025: Optimism with caution - For 2025, the market is betting on the Ibovespa index between 110 and 140 points, with only 9% of respondents predicting the index above 140 points. The Selic rate is projected at 15%, while GDP is expected to grow by 2,02%. The dollar, in turn, is estimated at R$ 6, and inflation, measured by the IPCA, is expected to close the year at 4,99%. However, considering recent history, these projections should be viewed with caution.

Gross errors and unpredictability - One of the most significant errors occurred in 2021, when the market predicted that the Selic rate would end the year at 3,25%, but it closed at 9,25%. Another example was the projection for the dollar in 2024: it was expected that the American currency would end the year quoted at R$ 5, but it closed at R$ 6,18, an increase of 27,3%. Inflation, which should have been at 3,90% in 2024, reached 4,83%, above the forecast.

The only correct prediction: the Ibovespa in 2022. The only projection that proved correct was that the Ibovespa would perform well in 2022. At the time, most analysts predicted that the index would remain below 120 points, but it closed the year with a 4,69% increase, reaching 109.735 points. This was the only correct prediction amidst a series of errors that marked market forecasts in recent years.

According to Rafael Ribeiro, professor of economics at UFMG and researcher at Made (Center for Research in Macroeconomics of Inequalities) at FEA/USP, the projections are based on statistical models that take historical data into account. However, unpredictable factors, such as climate change and global events, can compromise the accuracy of the estimates. "Everyone makes projections wanting to be right. But nobody who forecasts inflation today knows if we're going to have a very severe drought or a flood like the one last year in Rio Grande do Sul," says Ribeiro.

In addition to the unpredictability of external events, Ribeiro points out that statistical models are adjusted according to each economist's worldview. "That is, one economist may give more weight to a factor than another professional, according to each one's worldview," he explains. This subjectivity can lead to different interpretations and, consequently, to divergent projections.