Supermarket in Rio de Janeiro
SAO PAULO (Reuters) – XP has doubled its estimate for the rate of Brazilian economic expansion in 2022 to 1.6%, although it raised its inflation forecasts for this year and next due to the materialization of risks such as the adoption of lockdowns. fight against Covid-19 in China.
The upward revision of GDP from the previously forecast 0.8% advance came after signs of strong activity growth in recent months, “in the wake of the economic reopening, the solid recovery of employment, the increase in household disposable income and of the jump in commodity prices”, said XP in a report dated this Thursday signed by economist Rodolgo Margato.
However, XP still sees challenges on the inflationary front, and has risen to 9.2% and 4.5%, respectively, its inflation estimates for this year and next. The financial institution’s previous forecasts for the rise in the IPCA were 7.4% in 2022 and 4.0% in 2023.
“In our latest monthly report, we discussed and quantified the bullish bias for our inflation forecast. Since then, many of the risks listed have materialized or had a considerable increase in the probability of occurrence”, said XP in a separate report also dated this Thursday, signed by economist Tatiana Nogueira.
“A highlight is the worsening of disruptions in global supply chains due to the lockdown measures in China, the pressure on fuel prices and services accelerating with the reopening of the economy”, added XP.
With the scenario review, the institution starts to project inflation even higher than the centers of the targets pursued by the Central Bank – 3.5% for this year and 3.25% for the next. The objectives have a margin of tolerance of 1.5 percentage points plus or minus.
(By Luana Maria Benedito)
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