Data from the Macrofiscal Bulletin show greater optimism after the resilience of the Brazilian economy in the first quarter, despite the worsening of the pandemic and the reissue of measures of social isolation
O Ministry of Economy revised upwards the forecasts for the expansion of the Brazilian economy and the inflation in 2021, according to data from the Macrofiscal Bulletin released this Tuesday, 18, by the Economic Policy Secretariat (SPE). The estimate for the Gross Domestic Product (GDP) increased from 3.2% to 3.5%. For the years between 2022 and 2025, the economic team maintained the projection of 2.5%. The more optimistic outlook is justified by the resilience of the Brazilian economy in the first quarter, despite the upsurge in new coronavirus pandemic and the reissue of measures of social isolation. “Industry and services data surprised market expectations, making it likely that GDP will grow at the margin this quarter. Thus, the better results at the beginning of this year and the expectation of continuity of the vaccination process, boosting the service sector in the second half, made it possible to revise the GDP growth for 2021 by 0.3 pp, to 3.5% ” , informed the folder.
Despite the indication of an expansion of the economy in 2021, the ministry’s technicians stated that “the uncertainty in the current estimates still remains significantly high” and that “mass vaccination is essential for both current economic growth and future growth.” “As with any projection, there is uncertainty inherent in the estimates for the prospective horizon, especially in this period of the Covid-19 pandemic. In this way, using the forecast variance of the models considered, it is possible to estimate different scenarios for the growth of the activity, segmenting them in different percentiles ”, informed the SPE. The financial market estimates that the GDP of 2021 will end with an increase of 3.45%, according to data from the Focus Bulletin released this Monday, 17th. A week ago, the sources of the central bank projected increase of 3.21%, and of 3.04% a month ago. For 2022, the market estimates an increase of 2.38%.
To Broad Consumer Price Index (IPCA), the official meter of Brazilian inflation, the Ministry of Economy projects an increase of 5.05% in 2021. In the Macrofiscal Bulletin released in March, the forecast was 4.42%, while in the November 2020 edition the expectation was 3 , 23%. The new figure is above the center of the 3.75% target pursued by the Central Bank, with a margin of 2.25% and 5.25%. For 2022, the economic team estimates that inflation will end at 3.5%, while in 2023 the forecast is 3.25%. The financial market revised this year’s IPCA forecast upwards for the sixth straight week, from 5.06% to 5.15%. For 2022 and 2023, the forecast is 3.64% and 3.25%, respectively. The official meter of Brazilian inflation was 6.76% in the 12 months accumulated in April.
The Macrofiscal Bulletin also showed greater optimism with the recovery of the global economy after the shock of the new coronavirus pandemic, driven by the reopening of the main world economies and the appreciation of the commodities. “The prices of metals, meat and food exceed the level of December 2019, the period before the pandemic, by around 50%. In addition to the increase in these products, there is a lack of raw material for the production of some goods, thus tending to provide upward pressure on the price to the consumer ”, informed the ministry. According to the technicians, although uncertain, the scenario will bring benefits to Brazil.