The Institute of Applied Economic Research (Ipea) revised the forecast for Brazil’s Gross Domestic Product (GDP) this year to 1.8%. In March, the expectation was 1.1%. The projection is close to the one presented by the Central Bank a day earlier: 1.7%.
According to the technical note released by Ipea this Thursday (30), the change was caused by the positive performance of most sectors of the economy in April and May, in addition to the intensification of the improvement in the labor market. Also this Thursday (30), the IBGE (Brazilian Institute of Geography and Statistics) reported that the unemployment rate reached 9.8%, the best result for a quarter ending in May since 2015.
The Ipea points out that the highlight of the year should be the services sector, with the expectation of a high of 2.8%.
According to the National Confederation of Commerce in Goods, Services and Tourism, companies are recovering from the damages of the pandemic and lead the generation of jobs, with a balance of 658 thousand formal vacancies until the middle and expectation of another 673 thousand until the end of the year. . Education and tourism register the main resumptions. In relation to the performance of agriculture and industry, Ipea projects stability.
After a 1% rise in GDP in the first quarter of this year, the second half of 2022 holds more challenges. The researchers’ technical note points out internal and external obstacles, especially due to the war between Ukraine and Russia, which has now completed four months, with no end in sight.
The conflict in Eastern Europe harms international production chains and should continue to harm the economic scenario. In addition, Ipea highlights the high rates of inflation in several countries, showing that the problem is not limited to Brazil, where the rise in prices exceeds 12% in the last 12 months.
Internally, in addition to inflation, Ipea points out that the tightening of monetary policy should intensify its effects in the coming months, affecting, for example, the supply of credit. In addition, Brazilians face a drop in income, which makes it difficult to increase consumption and the circulation of money.
With uncertainties predicted for the second half of the year, Ipea also revised its GDP forecast for next year, but downwards: from 1.7% to 1.3%. The institute predicts a timid start to the year from the point of view of economic activity, with a recovery throughout 2023. The scenario depends on what should happen in the war, which could reduce global inflationary pressure.
Source: CNN Brasil
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