BRASILIA (Reuters) – Brazil’s Finance Ministry raised its financial development forecast on Friday to three.2% for this yr, projecting an acceleration in contrast with 2023, reflecting the resilience of Latin America’s largest financial system.
The ministry’s financial coverage secretariat calculation marks a pointy upward revision from the two.5% estimate in July, incorporating each the constructive shock in second-quarter exercise and expectations of stronger efficiency for the remainder of the yr, albeit at a slower tempo.
In 2023, Brazil’s GDP grew by 2.9%.
The brand new projection, which can function enter for the federal government’s bi-monthly income and expenditure report due subsequent week, is extra optimistic than personal economists’ 2.68% enlargement forecast within the central financial institution’s weekly survey.
Earlier on Friday, a central financial institution index confirmed better-than-expected financial exercise in July, persevering with a collection of strong indicators supported by a powerful labor market.
The situation has strengthened bets that the central financial institution will start a tightening cycle subsequent week, climbing rates of interest by 25 foundation factors after holding them at 10.5% for 2 consecutive coverage conferences.
The Finance Ministry additionally adjusted its inflation forecast for the yr to 4.25%, up from the earlier 3.9%, approaching the higher restrict of the official goal of three%, with a tolerance vary of 1.5 proportion factors.
For 2025, the ministry’s financial coverage secretariat barely lowered its projected GDP development to 2.5% from 2.6% and raised the anticipated inflation fee to three.4%, up from the earlier estimate of three.3%.
