Brazil will continue as the 11th global GDP in 2022 and will only return to the top 10 in the next decade

Brazil will continue as the 11th largest economy in the world in 2022. The forecast is in the annual report published this Sunday by the British Center for Research for Economy and Business (CEBR, its acronym in English).

The consultancy also estimates that the country should only return to the group of the 10 largest economies in the next decade. The study also predicts that, with the strong pace of growth in the United States, it will take China a few more years to reach the position of the greatest global economic power, which should be achieved by 2030.

The study annually analyzes the prospects of global economies, and compares countries’ wealth in dollars. In the report released this Sunday in London, economists work with the forecast of Brazilian growth of 1% in 2022 – an optimistic estimate in comparison with the financial market, which forecasts half the pace, with only 0.5%.

British economists point out that the Brazilian economy is going through a period of difficulties, with several problems that hamper growth. Among them, they especially highlight inflation. With the expectation of a 10% increase in prices in 2021, the CEBR highlights that this is the third highest inflation in the G20, only behind Argentina and Turkey.

“In addition to problems in production chains and high energy prices, the weakness of Brazil’s currency is an additional factor of pressure on inflation. The real has lost about a quarter of its value since the beginning of the pandemic, in 2020”.

Analysts also point out that the Brazilian economic scenario has the additional uncertainty generated by the elections. “The race for the presidency could cause further political instability,” says the document.

On the other hand, British economists recognize that the high rate of vaccination among Brazilians shows that the country will be able to show more resilience to possible new variants of Covid-19. In addition, they note that any improvement in the international commodity market – such as oil, minerals or food – could help the Brazilian economy in the short term.

For the future, the tone of the document is not very optimistic. “For the next 15 years, CEBR projections indicate that Brazil will have a modest improvement in the ranking of the world’s largest economies, rising from 11th place in 2021 to 9th place in 2036”.

USA x China
The study also updates forecasts for the world’s two largest economies: the United States and China. The document highlights that, despite the US having the largest number of victims of the pandemic, the US economy is gaining strength, especially after the large investment plan announced by President Joe Biden with figures in the trillions of dollars.

With these new investments, the US should grow 4% in 2022 and there are conditions for the GDP pace to continue at around 2% per year from 2024. The new Covid variants could be a risk for the realization of this scenario, says the text.

At the same time, CEBR believes China will gradually lose momentum in growth. The annual rate of expansion of China’s GDP is expected to go from 5.7% between the years 2020 and 2025 to 4.7% in the following five years, and decelerate further to 3.8% between 2030 and 2035.

This slowdown in China is caused by a number of factors, such as restrictions on the real estate market, the limited power of the country’s big tech companies and the indication from Beijing that it will prioritize economic stability in the coming years.

Even with the Chinese slowdown, the Asian country is close to taking the post of greatest global economic power from the US. “Faster American growth means China is likely to pass the US and become the world’s biggest economy by 2030 instead of 2028 as we predicted last year. Even so, it is still three years before our prediction made before the pandemic”, says the document.