Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Economists see stronger 2022 GDP for Brazil, inflation missing target for third straight year in 2023

Published 07/08/2022, 11:05 AM
Updated 07/08/2022, 11:11 AM
© Reuters. FILE PHOTO: People walk in front the Central Bank headquarters building in Brasilia, Brazil August 25, 2021. REUTERS/Amanda Perobelli

© Reuters. FILE PHOTO: People walk in front the Central Bank headquarters building in Brasilia, Brazil August 25, 2021. REUTERS/Amanda Perobelli

BRASILIA (Reuters) - Economists polled by the Brazilian central bank expect the economy to perform better this year but see inflation staying above the official target until 2023, marking three consecutive years of non-compliance.

The data is from the latest weekly Focus survey, published by the central bank on Friday after a pause due to a workers' strike that ended this week.

The median forecast of nearly a hundred private economists points to a 1.51% GDP expansion this year, in line with the government's official projection.

In January, this median was around 0.3% while some economists had even predicted a recession, fearing double-digit inflation and an aggressive cycle of monetary tightening would weigh on activity.

But the economy has shown signs of strength, supported by a faster improvement in the labor market.

Measures about to be approved in Congress to increase government cash transfers ahead of presidential elections should provide additional support. At the same time, they put pressure on consumer prices, potentially erasing part of the gains from recent fuel tax cuts.

In the survey, inflation is now expected to end this year at 7.96%, surpassing the official 3.5% target, with a band of 1.5 points more or less.

© Reuters. FILE PHOTO: People walk in front the Central Bank headquarters building in Brasilia, Brazil August 25, 2021. REUTERS/Amanda Perobelli

For 2023, the outlook is for inflation at 5.01%, also above the 3.25% target with the same margin of 1.5 points. Last year, inflation hit 10%, missing both the central bank's annual target of 3.75% and the 5.25% top of its tolerance band.

Economists consulted by the central bank estimate that, given the scenario, interest rates will reach 13.75% this year, from the current 13.25%, and will end next year still in double digits, at 10.5%.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.