Brazil Outlook Softens as IBC‑Br Shrinks and Focus Cuts Inflation Projections

Overview

• Brazil’s IBC‑Br fell 0.2% in October from September on a seasonally adjusted basis, its third straight monthly decline and a 0.4% rise year over year, according to the Central Bank.
• Market economists trimmed IPCA projections to 4.36% for 2025 and 4.10% for 2026 in the Boletim Focus, with 12‑month inflation at 4.46% inside the target band.
• The Selic stays at 15%, while the Focus median points to 12.13% by end‑2026, and economists remain split on whether cuts start in January or later in 2026.
• Rates futures slipped modestly through the session, the Ibovespa rose about 1.1%, and the dollar edged up 0.23%, as investors weighed weaker activity and easing prospects.
• High rates continued to reshape flows in 2025, with fund industry net inflows down 42% to R$145.5 billion through November and investor demand shifting toward tax‑exempt and high‑yield fixed‑income products such as CRIs, CRAs, LCIs, LCAs and CDBs.