Key facts
- Brazilian economists have raised inflation and interest rate forecasts through 2028.
- The central bank's monetary policy committee (Copom) is expected to cut the key Selic rate by 25 basis points to 14.25% on June 17.
- Annual inflation in Brazil increased to 4.72% in May, above the central bank's target.
- Persistent inflation pressures and potential El Nino effects are cited as concerns.
- A majority of economists anticipate another 25 basis-point cut in August.
Brazilian economists have raised their inflation and interest rate forecasts through 2028, signaling a potentially less aggressive rate-cutting cycle. This comes ahead of the central bank's monetary policy committee (Copom) meeting on Wednesday, where a third consecutive 25-basis-point cut to 14.25% is anticipated. Annual inflation in Latin America's largest economy rose to 4.72% in May, exceeding the central bank's 3% target. Analysts note that policymakers may maintain a cautious tone due to persistent price pressures and the potential impact of the El Nino weather pattern. Most economists surveyed expect another 25 basis-point cut in August, with median estimates placing the Selic rate at 13.75% by the end of 2026 and 12.00% by the end of 2027.