Brasil

January 24th, 2025

REGRESA

1. Market raises 2025 inflation estimate to 5.08%

Financial market economists have raised their inflation expectations for 2025 and 2026 for the 14th consecutive week. The data comes from a survey conducted with over 100 financial institutions which was published in the Focus Bulletin, released this week by the Central Bank.

According to the report, the projection for the basic interest rate remained stable. For the end of 2025, the market’s projection for the economy’s basic interest rate stayed at 15% per year. However, for the end of 2026, the financial market raised its projection from 12% to 12.25% per year. As for the end of 2027, the market’s projection for the Selic rate remained at 10.25% per year.

G1: Boletim Focus: mercado sobe estimativa de inflação de 2025 pela 14ª semana seguida, para 5,08%

2. Dollar drops to R$ 5.94, closes at lowest level since late November

With no significant news in the Brazilian economy, the dollar was influenced by the international market. The absence of announcements about raising trade tariffs for Latin America by President Donald Trump benefited emerging markets. The new U.S. president announced a 10% surcharge on Chinese products and 25% on goods from Mexico and Canada, starting February 1.

In addition to the lack of mentions of Latin America, the lower-than-expected percentages eased pressure on U.S. inflation. This reduces the need for the Federal Reserve to freeze or raise interest rates this year. Lower interest rates in advanced economies benefit emerging markets like Brazil. This is because Brazil’s high-interest rates attract financial capital, reducing pressure on the dollar and the stock market.

Agência Brasil: Dólar cai para R$ 5,94 e fecha no menor nível desde fim de novembro
InfoMoney: Dólar volta a cair com mercado retirando prêmios de risco e fecha a R$5,925

3. Inflation measured by IPC slows for the third consecutive week

Inflation, as measured by the Consumer Price Index (IPC-S), slowed for the third straight week, dropping to 0.12% from 0.18% and 0.31% in the previous weeks. With this week’s variation, the 12-month accumulated rate fell from 3.55% to 3.49%, according to data from FGV Ibre.

The Itaipu bonus, which reduced energy tariffs by 10.47% in January, and the 12.09% drop in airfare prices were the main contributors to the lower rate. Food inflation has also been gradually slowing since the first week of the year, decreasing from 1.42% to 1.38%, and now to 1.32%.

O Globo: Inflação medida pelo IPC desacelera pela terceira semana seguida

4. BNDES releases an additional R$ 4.8 billion for 2024/25 Harvest Plan programs

The National Bank for Economic and Social Development (BNDES) has released an additional R$ 4.8 billion for rural credit operations under the 2024/25 Harvest Plan programs. In a statement, the institution reported that R$ 2.7 billion is allocated to lines for commercial agriculture, while R$ 2.1 billion is directed toward family farming.

With this measure, the total funds still available in the various Federal Government Agricultural Programs (PAGF) to be distributed by the bank amounts to R$ 11 billion, with a utilization deadline set for June 2025.

CNN Brasil: BNDES libera mais R$ 4,8 bilhões para programas do Plano Safra 2024/25

5. Mergers and Acquisitions in Solar Energy Rise 76% in 2024 in Brazil

Brazil recorded 51 mergers and acquisitions in the solar energy sector in 2024, marking a 76% increase in transactions. This growth was driven by both the large-scale power plant market and small-scale photovoltaic generation, according to research conducted by Greener, a consultancy specializing in the sector.

The study identified 35 operations involving solar power plants, nearly tripling the 12 transactions recorded the previous year. Among these, 21 deals involved the purchase and sale of centralized generation plants, encompassing large-scale projects, -quadrupling the number seen in 2023.

Folha de São Paulo: Fusões e aquisições em energia solar crescem 76% em 2024 no Brasil, indica consultoria