The rise in Brazil’s headline inflation rate, to 4.8% y/y, in the first half of November was partly driven by a further increase in underlying core services inflation and means that Copom is likely to raise the Selic rate further than we previously thought. We now expect it to peak at 13.00% in the first half of 2025 (previously 12.00%). But a lot rests on the details of the government’s proposed spending cuts. Failure to soothe investors’ fears about the state of the public finances could prompt even more aggressive hikes.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services