Market now sees Selic at 12.25% by the end of 2026, says Focus

The market continues to project a cut in the basic interest rate only from 2026 onwards, but has begun to see it ending 2026 at 12.25%, according to the Focus survey released this Monday, 22, by the Central Bank.

The previous weekly survey had already shown a reduction in expectations for the Selic rate to 12.38% in the median of projections, after 32 weeks of maintenance at 12.50%.

+ Understand why the market continues to bet on interest rate cuts only in 2026

For this year, the expectation remains that the interest rate will end at the current 15%, after the Central Bank decided to maintain it last week, highlighting that the uncertain environment demands caution and that it will continue to evaluate whether maintaining interest rates at this level for a very long period will be enough to bring inflation to the target.

The survey of a hundred economists also showed that the expected IPCA increase in 2025 remains at 4.83%, with a slight downward adjustment of 0.01 percentage points in the 2026 estimate, to 4.29%. For 2027, the expectation remains at 3.90%.

The official inflation target is 3%, with a tolerance margin of 1.5 percentage points either way.

For Gross Domestic Product ( GDP ), growth estimates were maintained at 2.16% this year and 1.80% next year.

Projections for the dollar have not changed, remaining at R$5.50 by the end of 2025 and R$5.60 by the end of 2026.

The annual exchange rate projection published in Focus is calculated based on the average rate for the month of December, and not on the value projected for the last business day of each year, as was the case until 2020.

The median primary deficit for the consolidated public sector in 2025 rose from 0.52% to 0.51% of GDP. A month earlier, it was 0.53%. The fiscal target is a zero deficit in the central government accounts this year, with a tolerance of plus or minus 0.25 percentage points of GDP.

The interim estimate for the public sector primary deficit in 2026 remained at 0.60% of GDP. A month earlier, it was also 0.60%. Next year's target is a surplus of 0.25% of GDP for the central government, also with a tolerance of plus or minus 0.25 percentage points.

"The relevant horizon for the monetary authority is early 2027, which is why everyone is looking at this year's projections through the Focus report. However, despite the recent slowdown in the 2025 and 2026 projections, the 2027 projection hasn't declined in today's report. This prevents COPOM from initiating a cut before the end of this year, and thus the Selic rate remains stable at 15% until the end of 2025," assessed economist André Perfeito.

With information from Reuters and Estadão Conteúdo