Brazil reduces to 5.85% official inflation forecast for 2022

Brazil’s Ministry of Economy reduced the estimate of this year’s inflation rate from 6.30 to 5.85 percent due to the fall in the price of a barrel of oil in the international market and the reduction of federal and state taxes, according to forecasts released today, Thursday.

The Gross Domestic Product (GDP) growth estimate remained at 2.7 percent, according to the forecasts published in the MacroFiscal Bulletin prepared by the Secretariat of Economic Policy.

The growth expectation for 2023 was reduced from 2.50 to 2.10 percent, while that of inflation for that year went from 4.5 to 4.6 percent.

“As noted in previous bulletins, a slowdown in economic activity was expected in the second half of the year due to the lagged effects of the monetary policy tightening cycle,” the Secretariat noted.

At the same time, it continued, the impacts resulting from interest rate hikes are expected to diminish over the next year.

According to the bulletin, a sharper slowdown in international growth is assumed in 2023, but without a global recession taking shape.

The Brazilian government’s revisions align with those of other financial institutions. Economists consulted by the Central Bank indicate growth of 2.77 percent this year and inflation of 5.82 percent.

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