09/01/2024 – 12:53
The World Bank raised the growth forecast for the Brazilian economy in 2023 and 2024, citing the above-expected performance in activity throughout much of last year, but slightly reduced the estimate for the expansion of the Gross Domestic Product (GDP) in 2025 .
In a report with global economic perspectives, the World Bank estimated that 2023 GDP grew 3.1%. The previous forecast, released in June last year, pointed to a much smaller expansion, of 1.2%.
“The upward revision in 2023 growth was driven by stronger than expected performances in agricultural production, private consumption and exports in the first three quarters of the year,” the World Bank said in the report.
For 2024, the forecast is that GDP will grow 1.5% – or 0.1 percentage point more than the previous estimate -, reflecting the slowdown in activity in the second half of 2023 and the more moderate agricultural production this year.
“However, the gradual reduction in both headline and core inflation should allow for further interest rate cuts, supporting medium-term investment and consumption prospects,” the World Bank said.
According to the institution, this justifies the forecast of acceleration in GDP growth in 2025 to 2.2%, even though the government's capacity to offer fiscal support to the economy is limited by efforts to adjust public accounts. It is worth noting, however, that before the World Bank expected expansion of 2.4% for Brazilian GDP next year.
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