MNI BRIEF: 38% Chance of Exceeding 2024 Inflation Target -BCB
MNI (BRASILIA) - The Central Bank of Brazil sees a 38% chance of inflation exceeding the upper limit of the target tolerance range in 2024, according to its Quarterly Report for the third quarter of 2024 released Thursday, which revealed an increased likelihood than that seen in the previous report, which predicted a 28% probability.
"The probability of inflation exceeding the upper limit of the 3% target tolerance range increased from 28% to 36% for 2024, from 21% to 28% for 2025, and from 17% to 19% for 2026", the document said. The goal is 3% with a tolerance range of 1.5 points of percentage up or down.
The inflation forecast by monetary policy committee Copom increased to 3.5% in the baseline scenario from 3.4%. "The rise in the real interest rate was crucial in preventing a more significant increase in projections," the report said. (See MNI INTERVIEW: BCB To Step Up Hiking Pace In Nov.-Figueiredo)
The estimated output gap was revised to around 0.5% for the second and third quarters of 2024, higher than the figures used in the previous report, which were 0.0% and -0.2%, respectively.