Credit Suisse has sharply improved its estimate of Brazilian Gross Domestic Product (GDP) growth for this year, to 1.4%, after data on the services sector this Thursday (12) surprised positively, although it lowered the forecast. for activity in 2023.
Previously, the private bank had expected economic expansion of just 0.2% in 2022.
The upward revision came in the wake of the news that the volume of services in Brazil jumped 1.7% in March over February, the strongest result for the month in the historical series started in 2011 and well above the expectation in a Reuters survey, of up 0.7%.
“Upward surprises in services were more expressive in sectors that were heavily affected by the pandemic, indicating a faster recovery on the supply side of the economy. In addition, demand remained robust despite tightening financial conditions and higher inflation,” Credit Suisse said in a report signed by Solange Srour, Lucas Vilela and Rafael Castilho.
“The strong upward surprise confirms much better dynamics for economic activity seen in other economic indicators (including industrial production, retail sales and unemployment rate)”, which justifies the 1.2 percentage point improvement in the growth forecast. this year, said the private bank.
The latest IBGE data showed that Brazil’s industrial production had its first quarterly gain in a year in the first three months of 2022, while the retail sector grew more than expected in March.
The unemployment rate, in turn, ended the first quarter at 11.1%, the best result for the period since 2016.
Despite improving growth expectations for this year, Credit Suisse lowered its forecast for economic expansion in 2023 to 0.9% from 2.1% earlier.
The creditor cited expectations of an increase in the Selic to very high levels towards the end of the year and the later start of a cycle of monetary easing as responsible for the adjustment, in addition to a “worse outlook for global economic growth next year”.
Brazilian basic interest rates are expected to end this year at 14% and the next at 9.5%, according to Credit Suisse’s current scenario.
This week, the bank raised its forecasts for inflation in 2022 and 2023, to 9.8% and 5.1%, respectively, estimating that the rise in the IPCA will exceed the ceiling of the target pursued by Bacen for three consecutive years.
Source: CNN Brasil
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