The World Bank reaffirmed this Tuesday (10) its projection that the Gross Domestic Product (GDP) of Brazil should increase 0.8% this year and 2% in 2024. The numbers are in the Global Economic Perspectives report and repeat the estimated six months ago. For the year 2022, the institution believes that the Brazilian economy has grown by 3%, when previously it had projected an increase of 1.5% in this case.
High interest rates constrain investment, and Brazil is also facing “a slowdown in export growth,” says the World Bank.
In another section of the report, he comments that weather conditions “have been favorable” for the soy crop in the country, while in Argentina a prolonged drought harms wheat production.
The World Bank qualifies the ongoing slowdown in Brazil as “sharp”, with a sharp contraction in investment in 2023, in a context of high interest rates by the local central bank to contain inflation. The institution also says that uncertainty about the outlook for fiscal policy is “another headwind” for business confidence and investment.
“Brazil’s exports are expected to grow more slowly than in recent years because of the slowdown in demand growth for non-energy commodities,” says the report.
Consumer spending should be “somewhat supported” in 2023 by fiscal transfers and tax cuts adopted last year, in order to offset “soaring food and fuel prices”.
The World Bank also says that growth in investment should see “some acceleration”, and that the improvement in global demand supports export growth.
Source: CNN Brasil
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