Brazil’s central bank raises growth forecast for 2023 to 2%
The Central Bank of Brazil has revised its forecast for the country’s economic growth in 2023, raising it from 1.2% to 2.0%.
This updated projection reflects a more optimistic outlook compared to three months ago.
However, the bank also highlighted that Brazil’s economic scenario continues to be one of deceleration, influenced by global growth slowdown and the cumulative impacts of national monetary policy.
The upward revision in the growth forecast is attributed to the positive surprise of the first quarter.
Despite this increase, the bank emphasizes that the projection still indicates a deceleration of economic activity throughout the year.
The Central Bank’s projection aligns closely with the government’s estimate of 1.91% and slightly lags behind the expectations of financial market economists at 2.18%.
This confirms the overall slowdown trend in Brazil’s economy, following growth rates of 5.0% in 2021 and 2.9% in 2022.
The first quarter of 2023 saw a 1.9% growth compared to the previous quarter, driven primarily by the agricultural sector, particularly a record soybean harvest.
However, the bank anticipates a contraction in the agricultural sector for the rest of the year, contributing to the overall GDP slowdown along with other sectors of the economy.
In terms of inflation, the Central Bank revised its projection for 2023 from 5.8% in March to 5.0% currently.
The bank expects the deceleration in inflation observed in recent months to slow down in the second half of the year.
The drop in fuel prices, driven by government measures, has significantly reduced prices.
However, the bank anticipates higher accumulated inflation over the next 12 months as the impact of these measures diminishes.
The projected inflation for 2023 still exceeds the Central Bank’s target of 3.25%, with a tolerance margin of 1.5 points.
Looking ahead to 2024, the bank forecasts inflation to be 3.4%, a slightly lower rate compared to the previous projection.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief