Itaú Unibanco and Bradesco, Brazil’s two largest banks, maintain their estimates of 2.2% to 2.5% Brazil GDP growth this year, although they warn that the next two months will be crucial for the government. This is due to the below-expected productive activity in December and slightly contradictory economic indicators in January. The market still sees favourable points in civil construction, in the record agricultural harvest, in household consumption, and, mainly, in the increase in credit, although the general unemployment rate tends to remain around 11%.
The Broad Consumer Price Index (IPCA) forecast fell from 3.47% last week to 3.40% today in the last Focus Bulletin released by Brazil Central Bank on Monday. For 2021, the rate was maintained at 3.75%. Focus also revised down the estimate for the Gross Domestic Product (GDP) from 2.31% to 2.30%. From 2021 to 2023, it was kept at 2.50%. The exchange rate projection was also maintained at R$4.10 at the end of 2020.
The GDP of 83% of 193 countries grew faster than Brazil’s in the period 2010-2019, one of the worst decades of economic expansion for the South American country, according to a study by economist Marcel Balassiano of the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre / FGV). Based on data from the International Monetary Fund, the report establishes an average growth of 1.3% per year in that period, almost a third of the world average (3.8% per year).
The International Monetary Fund improved its economic growth forecast for Brazil and projects a 2.2% increase in its GDP for this year and 2.3% by 2021. In its last “World Economic Outlook” the IMF says that this variation of 0.2% in relation to its projection in October 2019 is due to the approval of the Brazilian Pension Reform and improvements in the mining sector. The global economy will have a slow recovery with a 3.3% growth in 2020.