Brazil's Post-Election Focus Report Cuts 2026 GDP, Inflation, and Dollar Forecasts

Economists surveyed by Brazil's Central Bank lowered projections for inflation, economic growth, and the dollar for 2026 in the first Focus report after the presidential election, which Lula won. The IPCA inflation estimate for end-2026 fell to 5.19% from 5.22%, while GDP growth was cut to 1.80% from 1.83%. The dollar forecast dropped to R$5.05 from R$5.13, though the Selic rate remained at 13.25%. The report follows Lula's victory over Flávio Bolsonaro, which triggered losses in Brazilian assets abroad. Economists expect two 0.25-point rate cuts in November and December, with the 2027 Selic projection also revised downward.