INSUBCONTINENT EXCLUSIVE:
pressures.This projection follows the January inflation data (IPCA), which revealed a monthly slowdown to 0.16% from 0.52%, with the annual
rate easing slightly to 4.56%
Policy Committee (Copom) already signaled a 1 percentage point hike in March, with UBS BB economists Alexandre de Azara, Fabio Ramos, and
Rodrigo Martins predicting another similar increase in May.If realized, this would bring the Selic rate to its highest level since the early
The Central Bank aims to anchor inflation expectations and stabilize the economy amid mounting fiscal and external challenges.Food prices
However, regulated prices rose unexpectedly, and a one-time discount on electricity bills reduced the IPCA by 0.55 percentage points.Brazil
Faces Inflation Challenges as UBS Projects Selic Rate Hike to 15.25% by May
(Photo Internet reproduction)Without this effect, monthly inflation would have reached approximately 0.7%
Core inflation measures also showed signs of acceleration, averaging 0.61% monthly and 4.5% annually
Currency depreciation has exacerbated inflationary pressures, with the Brazilian real trading above R$6 per U.S
UBS BB expects February inflation to rise by 1.3%, pushing the annual rate to 5.1%, with a peak of 5.5% projected in April before moderating
to 5% by year-end.The anticipated rate hikes reflect broader economic concerns, including fiscal imbalances and global uncertainties
Federal Reserve decisions and commodity price trends add complexity.Economists warn that high interest rates could dampen growth, with GDP
expected to slow from 3% in 2024 to around 2% in 2025
despite risks of economic slowdown and rising public debt costs
