Brazil's inflation expectations raised to 5.30%, interest rates expected to be 13.75% by the end of 2026, real projected to depreciate to 5.20

(1) The latest survey of economists by the Central Bank of Brazil shows that the annual IPCA inflation index forecast for 2026 has been raised from 5.11% to 5.30%, and the 2027 forecast has been raised from 4.03% to 4.10%. (2) The benchmark Selic interest rate forecast for the end of 2026 has been raised from 13.50% to 13.75%, and the 2027 year-end rate forecast has been raised from 11.50% to 12.00%, reflecting a steeper monetary tightening path. (3) The GDP growth forecast for 2026 has been slightly revised upward from 1.91% to 1.96%, while the 2027 growth forecast remains unchanged at 1.70%. (4) The forecast for the USD/BRL exchange rate at the end of 2026 has been revised downward from 5.15 to 5.20, and the forecast for the end of 2027 has been revised downward from 5.20 to 5.25, indicating that the local currency faces ongoing depreciation pressure.