Citi has worsened its forecasts for Brazilian economic activity, now expecting gross domestic product (GDP) to have advanced 4.4% in 2021 and dropped 0.3% in 2022, compared with previous estimates of growth of 4.5% and 0. .3%, respectively.
The more pessimistic forecasts came on the heels of service sector data released earlier on Thursday, which, while stronger than expected, “do not prevent a downgrade in our GDP forecasts,” Citi said. in report.
According to the Brazilian Institute of Geography and Statistics (IBGE), the volume of services provided in Brazil jumped 2.4% in November compared to October, the highest growth rate since February 2021 (+4.0%).
“The overall increase was broad, taking the gauge back to the August 2021 level, but still indicates a 0.3% negative statistical carry for the fourth quarter” from the previous three months, Citi said.
According to the US creditor, this adds to a worse-than-expected performance of industrial production, which fell by 0.2% in November, indicating a 0.2% contraction in GDP in the last three months of the year. past.
For this year, the estimate of economic retraction is justified by the perspective of monetary tightening – with the Selic rate expected to reach 12.25% per year – and by the spread of the Ômicron variant of the coronavirus, said Citi, also citing the negative statistical load. coming from the last quarter of 2021.
The Selic rate is at 9.25%.
Reference: CNN Brasil
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