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Tue, January 21, 2025

Economists ramp up projections for Brazil's interest rates to above 15%


Published on 2025-01-21 14:00:56 - Reuters
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  • Economists have launched a fresh wave of upward revisions to projections for Brazil's interest rate this year, citing deteriorating inflation expectations, a weaker currency and lingering concerns over the fiscal outlook of Latin America's largest economy.

Economists have significantly increased their projections for Brazil's interest rates, now expecting them to exceed 15% by 2025, according to a Reuters poll conducted from January 12-19. This adjustment comes in response to persistent high inflation rates, with the central bank's benchmark Selic rate currently at 13.75%. The poll indicates a median forecast of 15.25% for the Selic rate by the end of 2025, up from previous estimates. This hawkish outlook is driven by concerns over inflation, which has been above the central bank's target, prompting expectations of tighter monetary policy. Additionally, the Brazilian real has weakened, and there's a growing consensus that the central bank will maintain or even increase rates to combat inflation, despite potential economic slowdown risks.

Read the Full Reuters Article at:
[ https://www.reuters.com/world/americas/economists-ramp-up-projections-brazils-interest-rates-above-15-2025-01-21/ ]
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