For the first time, financial experts predict Brazil’s economy will grow 2.92% in 2023. A Central Bank survey reveals that this beats the 2.90% rate expected for 2022.
Last week, the estimate stood at 2.89%. This marks the fifth consecutive week of positive revisions.
At the year’s start, analysts forecasted just 0.60% growth for 2023. Brazil had robust numbers in prior years: 5.0% in 2021 and 2.90% in 2022.
Now, the experts’ estimates are aligning more with the government’s figures. Last week, the Ministry of Finance upgraded its 2023 projection from 2.5% to 3.2%.
Several factors influenced this revision. Positive economic indicators played a role, as did a strong outlook for agriculture.
Moreover, China’s anticipated economic rebound also contributed.
In addition, a recent surprise came from the Brazilian Institute of Geography and Statistics (IBGE).
They reported an unexpected 0.9% GDP increase for Q2 compared to Q1 this year. This was despite initial expectations of no growth.
Looking ahead, the Focus Bulletin estimates Brazil will see 1.50% economic growth in 2024. The forecast for 2025 is 1.9%, and for 2026, it’s 2.0%.
Background
For context, Brazil faced significant economic challenges in the past decade. The country grappled with recession, political instability, and high inflation rates.
However, the nation showed resilience with growth rates rebounding in 2021. This positive shift was in part due to strong agricultural performance and booming exports.
The COVID-19 pandemic, though damaging, less severely impacted Brazil compared to other countries.
Analysts note that China’s economic health has ripple effects on Brazil. China remains Brazil’s largest trading partner, particularly in the agriculture and raw materials sectors.
The mutual economic dependency explains why growth projections factor in China’s economic performance.