Brazil's Central Bank lowers 2026 inflation forecast to 5% in weekly Focus Bulletin

Banco Central do Brasil issued the Boletim Focus on Tuesday, August 8, reducing the projected annual inflation rate for 2026 by 0.01 percentage points. The Índice Nacional de Preços ao Consumidor Amplo (IPCA) expectation fell from 5.01% to exactly 5%. This marks the second consecutive week of downward adjustments for the year. The central bank maintained its foreign exchange projection at R$ 5.20 per dollar and held the economic growth estimate unchanged for 2026, raising it only marginally from 1.92% to 1.93%. Consequently, the Selic rate forecast remained fixed at 13.75% per annum. Beyond 2026, the institute raised its 2027 inflation projection slightly to 4.29% after previously citing 4.28%, while keeping 2028 at 3.80% and 2029 at 3.50%. The Índice Geral de Preços do Mercado (IGP-M) also saw its 2026 estimate decline from 4.38% to 4.34%. In the sector of administratively controlled prices, the 2026 forecast increased to 4.71% from 4.69%, continuing a streak of reduced estimates in recent weeks.