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Brazil analysts raised their 2022 and 2023 inflation forecasts further above target as Russia's invasion of Ukraine prompts a global surge in commodity prices.
Consumer prices will end this year at 5.6%, up from 5.56% previously, according to a weekly central bank survey published on Wednesday. It was the seventh straight increase. Analysts kept their 2022 year-end estimate for the benchmark Selic rate unchanged at 12.25%.
Policy makers led by Roberto Campos Neto are battling above-target inflation driven by persistent global energy shocks. While domestic factors like severe weather have played a role in Brazil's consumer price spike, international drivers such as high commodity costs are now rising to the forefront.
Analysts see consumer prices at 3.51% in 2023 and 3.1% in 2024, both up from last week's estimates. Brazil's central bank targets inflation at 3.5% this year, 3.25% next year and 3% in 2024.
Brazil has led one of the world's most aggressive tightening cycles in the wake of the pandemic, raising rates by 875 basis points since last March, to 10.75%. Policy makers have signaled they could slow down their pace of hikes this month.
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