O Bank of America announced this Monday (15) that it raised the projection for the Gross Domestic Product (GDP ) in Brazil for 2022. Now, the bank expects growth of 2.5%, compared to 1.5% in the last forecast.
The change took place after the release of the Central Bank’s Economic Activity Index (IBC-Br ) referring to the month of June, which had growth of 0.69% . The increase was higher than expected by both the bank and the market.
“After a weak month in May, the economic activity index returned to a strong number, driven by services, which are showing resilience in relation to other sectors: in June, retail sales fell by 1.4% and production industrial fell 0.4%. Meanwhile, services were again a positive highlight, posting an increase of 0.7%, driven by transportation services.
According to the bank, confidence indicators point to a worse scenario ahead, but still with positive expectations, even with a more challenging second semester, “when the economy should feel the impact of a tighter monetary policy”.
For the bank, the measures to expand social programs with the Benefits PEC should exert upward pressure on growth this semester, as well as the drop in fuel prices, despite the effects of higher Selic rate for economic activity.
“Despite the challenging external scenario, amid an environment of high inflation and downward revisions to global growth, the data from Brazil surprised positively. The effects of the Central Bank’s tightening cycle should be felt more smoothly in the second half, given the payment of extended social assistance such as Auxílio Brasil and the recent fuel tax cuts”, says the bank.
Bank of America also states that as “fiscal and inflationary risks have been postponed to next year, we now expect that the second half of the year should show a more moderate deceleration than we previously expected”.
This Monday, the new edition of Focus Bulletin which brings together the projections of market agents, brought a GDP growth forecast of 2% in 2022 in the seventh consecutive rise.
Source: CNN Brasil
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