IMF: Brazil will have the lowest GDP growth in 2023 among emerging economies

The International Monetary Fund (IMF) raised its growth expectation for Brazil’s Gross Domestic Product (GDP) in 2023 and lowered it for 2024, according to the World Economic Outlook (WEO) report, which monitors the global economy and was published on Monday 30th.

The Brazilian economy should grow 1.2% this year, an increase of 0.2 percentage points in relation to the October report.

However, the rate is lower than that projected for other emerging countries.

For 2024, the WEO’s projection is for growth of 1.5%, a 0.4 percentage point decrease against its previous projection.

According to the IMF report, emerging economies, whose growth projection in 2022 was 3.9%, are expected to grow 4% in 2023 and 4.2% in 2024.

Among the BRICS members, India, whose growth estimate in 2022 was 6.8%, has the best projection for 2023 and 2024, of 6.1% and 6.8%.

China, which grew only 3% in 2022 because of covid restrictions, has projected growth of 5.2% and 4.5% this year and next.

South Africa will have more modest growth, similar to Brazil, according to the IMF, of 1.2% in 2023 and 1.3% in 2024.

Russia, which invaded Ukraine in February last year and had its economy shrink by 2.2% in 2022, is expected to grow only 0.3% this year and 2.1% in 2024.

Even the projection for Latin America exceeds that of Brazil.

The report forecasts growth of 1.8% this year and 2.1% in 2024.

“Growth [in the region] is projected to fall from 3.9% in 2022 to 1.8% in 2023, with a 0.1 percentage point increase in 2023 over the last report,” the WEO reports.

The Brazilian growth projection is also below the world GDP projection of 2.9% in 2023 and 3.1% next year.

Concerning the 2022 GDP, not yet officially calculated by the IMF, the estimate was revised in October.

In this report, the agency estimates a global economic advance of 3.4%, compared to 3.2% in the October report.

Conversely, Brazil appears in this report with an estimated growth of 3.1% for the year, 0.3 percentage points higher than the last projection.

The Brazilian Institute of Geography and Statistics (IBGE) will release last year’s GDP data on March 2.

“The global fight against inflation, Russia’s war in Ukraine, and the resurgence of covid-19 in China weighed on global economic activity in 2022, and the first two factors will continue to weigh in 2023″, the IMF report said.

On rising prices globally, which hit virtually all countries from the middle of 2021 due to measures to combat the covid-19 pandemic and became more pronounced in 2022 with the invasion of Ukraine, the report states that inflation has not yet peaked in most economies and remains well above pre-pandemic levels.

“It persists amid effects from a second round of cost shocks and tight labor markets, with wage growth robust as consumer demand remained resilient,” the report states.

The fund cites Brazil, with an interest rate of 13.75% per year, as one of the countries that have completed the path of monetary tightening in an attempt to lower inflation.

In 2022, inflation stood at 5.79%, an index below that of the United States, the United Kingdom, and the European Union.

“The processes have led central banks to raise interest rates faster than expected, particularly in the United States and the Eurozone, and to signal that rates will remain high for longer. Core inflation is declining in some economies that have completed their tightening cycle – such as Brazil,” the FMI analyzes.

With information from Revista Oeste