Brazilian economists cut inflation and growth forecasts in Focus report

Economists surveyed by Brazil's Central Bank lowered their inflation, growth, and exchange rate forecasts for the end of this year, according to the Focus report released Monday, which also cut its 2027 interest rate projection. The survey closed Friday, before the presidential runoff. The market now sees 2026 IPCA inflation at 5.19%, down from 5.22% a week earlier, while the 2027 estimate rose to 4.34% from 4.32%. GDP growth projections fell to 1.8% for 2026 and 1.31% for 2027, with the dollar seen at R$5.05 by year-end. The Selic rate was kept at 13.25% for 2026, with two expected 0.25-point cuts, but lowered to 11.75% for 2027. Following President Lula's reelection over Flávio Bolsonaro, Brazilian assets fell sharply abroad, as markets favored the challenger on fiscal control hopes.