Brazil Minor Uptick in 2027 Inflation Expectations

Economics Research 8 September 2026 | 7:35AM EDT

Brazil: Minor Uptick in 2027 Inflation Expectations; Unchanged Selic Path (Ramos)

Bottom Line: Inflation expectations for 2026 declined by a negligible 1bp to a high Alberto Ramos | 5.00%, but for the policy-relevant 2027 rose by 1bp to 4.29%; both well above the 3.0% Goldman Sachs & Co. LLC inflation target. The median expectations for the end-2026/27/28 Selic were stable at 13.75%/12.00%/10.50%. The expectations for 2026/27 real GDP growth are tracking at 1.93%/1.50% (+1bp and unchanged, respectively). The median expectation for the primary fiscal balance of 2026-29 remains in negative (deficit) territory, contrary to the government’s targets of non-negative prints, attesting to the low credibility and weak anchoring effect of the fiscal framework. The nominal fiscal deficit is expected to remain deep in the red (over 7%) over the medium term: 8.79%/8.50%/7.80%/7.38% for 2026/27/28/29.

1. According to the central bank’s weekly survey of market analysts, the median inflation expectation for 2026 declined by a minor 1bp to 5.00% but for the more policy relevant 2027 increased by 1bp to 4.29%. 2. The median inflation expectations for 2028/29 remained stable at 3.80%/3.50%; both above the 3.0% target. 3. The median market expectations for Selic for end-2026/27/28/29 remained stable at 13.75%/12.00%/10.50%/10.00%. 4. The expectation for real GDP growth in 2026 is tracking at 1.93% (1.92% a week ago), for 2027 at 1.50% (1.50% a week ago). 5. The median expectation for the primary fiscal balance remains in the red through 2029: -0.50%/-0.40%/-0.22%/-0.15% of GDP, contrary to the government’s path of rising primary surpluses. This is consistent with the continuously rising public sector debt. 6. The BRL/USD median expectation for year-end 2026 is at 5.20 (5.20 a week ago) and for year-end 2027 at 5.30 (5.30 a week ago).

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Median Inflation Expectations: Above Target 2026-2028 Expectations 12-Month Ahead Inflation Expectations

Percent change, year ago Percent change, year ago Percent change, year ago Percent change, year ago End- -month ahead inflation expectations End- End- IT: 3.00% 3.00 3.0 IT: 3.00% Sep-22 Mar-23 Sep-23 Mar-24 Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Source: BCB, Haver Analytics, Goldman Sachs Global Investment Research Source: BCB, Haver Analytics, Goldman Sachs Global Investment Research

Median Selic Policy Rate Expectations Median Real GDP Growth Expectations Percent Percent Percent change, year ago Percent change, year ago

Sep-23 Mar-24 Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Mar-26 Jun-26 Sep-26

Source: BCB, Haver Analytics, Goldman Sachs Global Investment Research Source: BCB, Haver Analytics, Goldman Sachs Global Investment Research

Median Primary Fiscal Balance Expectations Median Overall Fiscal Balance Expectations

Percent of GDP Percent of GDP Percent of GDP Percent of GDP

- Lula's Term Lula's Term - Sep-22 Sep-23 Sep-24 Sep-25 Sep-26 Sep-22 Sep-23 Sep-24 Sep-25 Sep-26 Source: BCB, Haver Analytics, Goldman Sachs Global Investment Research Source: BCB, Haver Analytics, Goldman Sachs Global Investment Research