World Bank forecast for the Asian country is 2.8% in 2022, below the top of Brazilian performance projections
The new prediction of the World Bank is that China’s GDP (Gross Domestic Product) will grow by only 2.8% in 2022. The institution presented a report with new forecasts for Asian countries on Monday (26.Sep.2022).
Chinese GDP grew by 8.1% in 2021. The expected reduction for 2022 is a consequence of restrictions to end covid.
Bank of America estimates that Brazil’s GDP will grow by 3.25% in 2022. Goldman Sachs estimates a rise of 2.9%.
If Brazilian growth exceeds that of China, it will be the first time in 41 years. In 1980, Brazil’s GDP grew by 9.2% and China’s by 7.8%. Brazil has never surpassed China. THE current forecast of the World Bank for Brazil is 1.5%. It came out in June. The Latin America review will be out on Wednesday (4.Oct).
Market analysts consulted by the BC (Central Bank) have been raising their estimates every week. The most recent median of the Focus bulletin estimates is 2.67%.
Analysis
Chances are great that Brazilians’ feeling of prosperity will increase after the election. It depends on who wins.
Exceeding China’s rate, if confirmed, will be remarkable. But even if it is a consequence of something episodic, as a result of the radical policy to eliminate covid in the country, it must also be seen as a consequence of something bigger.
After the impressive growth of the last few decades, it becomes more difficult to move forward. This is in part a consequence of the so-called “middle-income trap”, which helps to explain Brazil’s growth difficulties since the 1980s.
The benefits of cheap labor and productivity gains from investments in production become less obvious. The population is less willing to make sacrifices.
For Brazilian exporters, it will be necessary to target other Asian economies, which tend to grow more strongly than China.
But Brazil also needs to look for new opportunities in China. A more mature economy faces challenges and also tends to look more towards other countries as an investment destination.
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