Brazil’s central bank says slower economic activity in 2027 is essential for inflation to converge on its 3% target. It forecasts GDP growth of 1.4%, against the government’s 2.3% projection, and annual inflation of 3.1% from the second quarter of 2028 onward.
Acting Economic Policy Director Paulo Picchetti said the opening of the output gap built into the 2027 forecast is essential for prices to converge in the bank’s models. Governor Gabriel Galipolo cited unusually high uncertainty, saying policymakers should avoid false precision and would not overreact to individual data points to prevent unnecessary volatility.
Galipolo said planned macroprudential measures aim to curb aggressive lending practices and predatory credit. He said credit-card delinquency stands at 65% and called a product with such a high rate a design flaw, but did not detail the new rules.
