Brazil recovers despite international turmoil, says economy minister

RIO DE JANEIRO, BRAZIL – During an event celebrating the 25th anniversary of the General Telecommunications Law (LGT), the minister said that financial institutions had revised upward forecasts for Brazil’s gross domestic product (GDP, the sum of goods and services produced in the country).

“The country will spend the year revising [GDP growth] forecasts upward. This is the opposite of what happens in other countries that revise their forecasts downward,” Guedes said.

Brazil’s Economy Ministry sources said the portfolio would raise its growth forecast this year to 2% from 1.5%, a change backed by stronger-than-expected recent economic indicators.

According to the latest edition of Focus Bulletin, a market research conducted by the Central Bank (BC) with financial institutions, market analysts believe in 1.59% growth. The high estimate is for two consecutive weeks, according to the BC publication.

Activity has rebounded despite double-digit inflation and monetary policy tightening, considered among the most aggressive among the world’s major economies.

Activity has rebounded despite double-digit inflation and monetary policy tightening, considered among the most aggressive among the world’s major economies.

Services activity in Brazil resumed growth in May and at a faster pace than expected, according to official data on Tuesday. Labor market figures also beat expectations, with the unemployment rate falling to single digits for the first time since early 2016.

In addition, the government-backed spending package about to be approved in the Chamber of Deputies should boost consumer demand this year, increasing income transfers to the poorest as President Jair Bolsonaro seeks re-election in October.

As with recent events, Guedes affirmed that Brazil can consolidate as a powerhouse of energy and food production at a time when the world “can go through a war on a global scale.”

According to the minister, some analysts highlight the possibility of a recession in the United States and an even more difficult situation in Europe, with war and an energy crisis.