The war in the Middle East and the possible effects of El Niño made the economic team revise upwards the inflation projection for 2026. The estimate for the Broad National Consumer Price Index (IPCA) rose from 4.5% to 5.1%, remaining above the target ceiling established by the National Monetary Council (CMN).
Official inflation projection rises to 5.1%, exceeding the target
The war in the Middle East and the possible effects of El Niño made the economic team revise upwards the inflation projection for 2026. The estimate for the Broad National Consumer Price Index (IPCA) rose from 4.5% to...
The Gross Domestic Product (GDP) growth forecast was maintained at 2.3%. The new projections are contained in the Macrofiscal Bulletin, released this Wednesday (15) by the Economic Policy Secretariat (SPE) of the Ministry of Finance.
Higher inflation
According to the economic team, the review mainly reflects the increase in international prices of oil and its derivatives, amid the conflict in the Middle East, in addition to the expected effects of the El Niño climate phenomenon on food production.
The Treasury assesses that these factors could maintain pressure on prices over the next few months.
Projections
The new scenario presented by the government envisages:
Inflation in 2026: 5.1%, compared to previous projection of 4.5%
Inflation target: 3%, with a ceiling of 4.5%
Inflation in 2027: revision from 3.5% to 3.6%
After 2027: expectation of convergence towards the 3% target
In relation to food, the Ministry of Finance highlights that El Niño can compromise harvests and increase prices.
"Upward pressures in the second half of the year are associated with the greater probability of El Niño occurring and the persistence of the shock in supply and fertilizer prices", states the bulletin.
External pressures
The economic team points out that the conflict in the Middle East has raised oil prices, a scenario that tends to affect fuel and other economic costs.
According to the Treasury, geopolitical uncertainties could prolong these impacts and make it difficult for inflation to slow down more quickly.
Maintained GDP
Despite the worsening in price projections, the government kept its economic growth expectations unchanged in 2026.
Growth
The estimates released by SPE are:
GDP in 2026: 2.3%, no change in relation to the previous bulletin;
GDP in 2027: projection reduced from 2.6% to 2.5%;
From 2027 to 2030: average growth estimated at 2.6% per year.
According to the Ministry of Finance, economic activity should continue to be supported mainly by the industry and services sectors, while agriculture tends to slow down after the record harvest recorded at the beginning of the year, driven by soybean production.
Tax scenario
The revision of projections takes place at a time of greater uncertainty on the international scene, marked by geopolitical conflicts and climate risks. In the economic team's assessment, these factors could maintain inflation above expectations in the short term, although the expectation is for gradual convergence towards the target in the following years.
The Macrofiscal Bulletin provides estimates for the economy that guide the preparation of the next Bimonthly Revenue and Expense Assessment Report.
Expected to be released by the 24th, the report guides the execution of the Budget, generally with determinations of blocks (cuts to respect the spending limit of the fiscal framework) and contingencies (suspension of spending if government revenues fall below forecasts).
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Source: Noticias ao Minuto - Economia
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