Brazil economists cut end-2026 interest rate forecast to 13.50%

Key facts

• Economists now forecast Brazil's key Selic rate to end 2026 at 13.50%.
• The previous forecast for the end-2026 Selic rate was 13.75%.
• Brazil's central bank recently cut its benchmark interest rate by 25 basis points to 13.75%.
• Economists maintained their end-2027 Selic forecast at 12%.
• The end-2026 inflation forecast was raised slightly to 4.92% from 4.90%.
• The end-2027 inflation forecast remained unchanged at 4.30%.

Private-sector economists polled by Brazil's central bank have reduced their forecast for the country's benchmark interest rate at the end of 2026. The latest Focus survey, published on Monday, indicates expectations for one additional 25-basis-point cut, bringing the projected Selic rate to 13.50% from the previous poll's 13.75%.

Last week, the central bank implemented its fifth consecutive interest rate cut, lowering the Selic rate to 13.75%. The bank has maintained flexibility in its policy decisions ahead of next month's presidential election.

Latin America's largest economy is exhibiting clearer signs of a slowdown, accompanied by easing inflation. Economists kept their end-2027 Selic forecast unchanged at 12%. The inflation forecast for the end of 2026 was marginally increased to 4.92% from 4.90%, while the end-2027 inflation forecast remained steady at 4.30%. Brazil's central bank has a target inflation range of 3%, with a 1.5 percentage point tolerance either side.