Brazil economists raise inflation, rate forecasts after Lula reelection

SAO PAULO, Nov 3 (Reuters) - Private-sector economists raised their forecasts for Brazil’s inflation and interest rates in the first weekly central bank poll since left-wing President Luiz Inacio Lula da Silva’s reelection on October 25, the survey showed on Tuesday.

The forecast for inflation at the end of 2027 rose to 4.76% from 4.34%, while expectations for the central bank’s benchmark interest rate increased to 13.50% from 13.25% for end-2026 and to 12.50% from 11.75% for end-2027.

• GDP growth forecasts for 2026 and 2027 fell to 1.76% and 1.2%, respectively, from 1.8% and 1.31% in the previous survey

• The Brazilian real was forecast at 5.34 per US dollar at the end of 2026 and 5.40 at the end of 2027, compared with 5.05 and 5.15 per dollar in the previous survey, respectively

• Lula’s victory over right-wing Senator Flavio Bolsonaro, whom investors had viewed as the more market-friendly candidate, triggered a sharp selloff in Brazilian assets last week

• Brazil’s central bank has an inflation target of 3%, plus or minus 1.5 percentage points

• The bank’s board is set to announce its next interest rate decision on Wednesday, after five straight 25-basis-point cuts that brought the Selic rate to 13.75%