🔆 BUYSIDEBRAZIL | MONTHLY REPORT
Monthly Outlook: Breaking Down the Projections – March/26
✅ In this report, we revise our projections in light of the conflict in the Middle East and the rise in oil prices, which add inflationary pressure, compress households’ real income, and increase uncertainty around both the domestic and global outlook.
✅ In the United States, we lowered our growth forecast from 2.7% to 2.4%, with a “U-shaped” trajectory throughout the year, and now project the Fed Funds rate to remain at 3.75% over the entire horizon, as underlying inflation above target leaves no room for rate cuts.
✅ In Brazil, we maintain GDP growth at 1.8%, supported by a record soybean harvest, construction sector stimulus, and the initial effects of the income tax reform, although the oil shock has introduced downside risks, making the balance more evenly distributed. On the fiscal side, we project a primary balance of -0.55% of GDP, with a bias toward a better-than-expected outcome, driven by additional oil-related revenues. We revised our IPCA forecast from 3.9% to 4.3% and the terminal Selic rate from 12.00% to 12.50%, reflecting the energy shock and its effects on fuel prices, food, and inflation expectations.
