CNI revises from 0.9% to 1.4% GDP growth forecast in 2022

The National Confederation of Industry (CNI) revised from 0.9% to 1.4% its estimate of a high Gross Domestic Product (GDP) in 2022. The change, as justified by the entity this Friday (8), is due to the improvement in the job market and the heating up of the service sector in the first semester.

In the previous release, made in April, the entity had revised the figure from 1.2%, in December, to 0.9%, due to the effects of the war in Ukraine and the worsening of the Covid-19 pandemic in China, that put pressure on prices and postponed expectations for the normalization of global production chains.

“The recovery of the labor market remains firm, with employment on the rise since 2020, totaling 97.5 million employed persons, the highest occupation since the beginning of the series, in 2012. The average real income has also been growing, despite inflation high”, said the CNI in a note.

The entity also revised the expectation of the average unemployment rate for the year, from 12.9% to 10.8%, and the growth of the real wage bill, from 1.4% to 1.6%.

The unemployment rate has been falling since last year and reached 9.8% in the quarter ending in May, after reaching 14.8% in the quarter to April 2021.

The CNI also cites some positive transitory effects in the first months of the year, with the advance of the 13th salary for INSS retirees and pensioners, the release of FGTS withdrawals, the resumption of payment of the salary bonus, and the increase in direct income transfers .

Regarding the service sector, CNI cites the post-pandemic normalization process, which mainly benefited services related to mobility. In this way, the growth projection changed from a high of 1.2% to a high of 1.8%.

The industry’s GDP was also revised upwards, from a drop of 0.2% to a high of 0.2%, “although the sector is still going through difficulties”, he says.

Agriculture, on the other hand, had worse expectations, with a forecast of stability (0%), compared to a rise of 1.3%. “The retreat is due to the effects of adverse weather at the beginning of the year for soybeans, which were more intense than expected”, he says.

Regarding the second half of the year, CNI points out that it expects a continuity of the positive performance in the economy, based on the second quarter data available so far.

The improvement forecast comes despite pressured inflation globally. “The CNI revised upward the inflation forecast (IPCA) for 2022, from 6.3% per year to 7.6% per year, even considering the significant impact of the reduction in ICMS on fuels (gasoline, diesel and ethanol), electricity, telecommunications and public transport”, he says.

Regarding the Selic, the CNI expects another increase in August, which would take the rate to 13.75% per year until the end of 2022.