Key facts
- Brazil's central bank forecasts inflation at 3.1% in Q2 2028 and Q1 2029.
- The bank projects 1.4% GDP growth in 2027.
- The government projects 2.3% GDP growth in 2027.
- Acting Economic Policy Director Paulo Picchetti stated that the output-gap opening in the 2027 forecast is essential for price convergence.
- Central bank governor Gabriel Galipolo emphasized avoiding "false sense of precision" when assessing inflation convergence.
- Galipolo noted increasing signs of economic activity slowing.
- Galipolo mentioned plans to curb aggressive lending practices and predatory credit, citing 65% credit card delinquency rates.
Brazil's central bank views a slowdown in economic activity next year as essential for inflation to converge to its 3% target, according to acting Economic Policy Director Paulo Picchetti. He stated that the "output-gap opening embedded in our 2027 forecast is essential for prices to converge in our models." The bank forecasts gross domestic product growth of 1.4% in 2027, below the 2.3% expansion projected by the government. Central bank governor Gabriel Galipolo said policymakers are approaching data with "humility" given the high uncertainty and must avoid relying on a "false sense of precision" when assessing inflation convergence, which is forecast at 3.1% from the second quarter of 2028 onward. Galipolo noted that signs of slowing economic activity are becoming increasingly evident and that the bank aims to curb aggressive lending practices and predatory credit, citing a 65% credit card delinquency rate.