BRASILIA, May 18 (Reuters) – Brazil’s Finance Ministry on Monday sharply raised its inflation forecast for this year to 4.5% from the 3.7% \u200cprojected in March, citing the impact of the Middle East conflict \u200con oil and fuel prices and foreseeing a more modest monetary easing cycle.<\/p>\n
Inflation is now \u200bseen at the top of the central bank’s official target range, centered at 3% with a tolerance of 1.5 percentage points on either side.<\/p>\n
According to the ministry’s economic policy secretariat, the average oil price estimate for 2026 has risen \u200c25% since its last forecast \u2060two months ago, to $91.25 per barrel this year.<\/p>\n
That more than offset the effect of a stronger currency expected by year-end, \u2060the ministry said, noting that the projection also incorporates the impact of mitigation measures adopted by President Luiz Inacio Lula da Silva’s government to limit the \u200bpass-through of \u200bhigher fuel prices to the domestic market.<\/p>\n
The \u200bleftist administration now expects the \u200crate-cut cycle launched in March by the central bank to leave the benchmark Selic rate at 13% at the end of this year, compared with a previous estimate of 12%.<\/p>\n
The Selic currently stands at 14.5% following two consecutive cuts of 25 basis points each by policymakers.<\/p>\n
Despite the revisions, the government remains \u200cmore optimistic than the market.<\/p>\n
Economists surveyed weekly \u200bby the central bank have raised their \u200binflation estimate for this year \u200bfor a 10th consecutive week, to 4.92%, and see the \u200cSelic ending the year at a \u200bhigher 13.25%.<\/p>\n
While the government \u200bkept its economic growth forecast unchanged at 2.3% for 2026, pointing to an expected slowdown in the second and third quarters and a \u200bslight rebound toward year-end, \u200cthe median estimate in the survey of economists points to gross \u200bdomestic product growth of 1.85% this year.<\/p>\n
(Reporting by Marcela Ayres; Editing \u200bby Gabriel Araujo and Aurora Ellis)<\/p>\n","protected":false},"excerpt":{"rendered":"BRASILIA, May 18 (Reuters) – Brazil’s Finance Ministry on Monday sharply raised its inflation forecast for this year…\n","protected":false},"author":2,"featured_media":455418,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,39475,61,1095,60,7634,152651],"class_list":["post-455417","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-finance-ministry","tag-ie","tag-inflation","tag-ireland","tag-luiz-inacio-lula-da-silva","tag-middle-east-conflict"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/455417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=455417"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/455417\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/455418"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=455417"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=455417"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=455417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}