Brazil’s 2023 GDP growth forecast raised by industry leaders due to agricultural sector

The industry trade group increased its projection for Brazil’s 2023 GDP growth from 1.2% in April to 2.1% in June, attributing this uptick to a strong agricultural sector.

The National Confederation of Industry (CNI) suggests that Brazil’s economy, the largest in Latin America, will grow 2.1% this year, spurred by a projected 13.8% expansion in agriculture.

Conversely, industrial and service sectors are expected to decelerate.

The updated industry projection aligns closely with the Central Bank and economists’ predictions of 2.0% and 2.19% respectively, albeit slightly below the Finance Ministry’s 2.5% estimate.

These figures reflect a slowing trend in Brazil’s economic growth, compared to 5.0% in 2021 and 2.9% in 2022.

The CNI stated that industry growth will be limited to 0.6% in 2023, due to high interest rates and credit constraints.

Similarly, the service sector, comprising roughly 70% of the Brazilian GDP, is also projected to slow down.

The trade group stressed that with successful tax reform and controlled inflation, the Central Bank might be able to lower interest rates.

Additionally, the CNI revised its 2023 inflation forecast from 6.0% in April to 4.9% in June.

It also predicts the average unemployment rate to drop from 9% in 2022 to 8.3% in 2023, with an anticipated exchange rate decrease from 5.24 to 4.90 reais to the dollar.

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