IMF raises Brazil’s GDP growth forecast to 5.3% in 2021

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O International Monetary Fund raised to projection of growth do Brazil from 3.7% to 5.3% in 2021, but reduced the forecast for 2022 from 2.6% to 1.9% in the July revision of the World Economic Outlook report. In the document, the IMF improved some estimates of the country’s fiscal indicators for this year, influenced by the advance of the gross domestic product.

The nominal public deficit as a proportion of GDP should reach 6.3%, below the 8.3% reported in April, and the gross public debt should reach 91.8% on the same basis of comparison, lower than the 98.4% reported previously.

The revision of the Fund’s projections only brought new estimates on the GDP of countries and some figures related to their public accounts, without dealing with other indicators, such as projections for inflation, current account deficit and unemployment rate.

The IMF highlighted that, in the case of Brazil, the increase in the growth projection for this year was largely motivated by more favorable GDP results in the first quarter and by an increase in the terms of trade in international trade, which benefits the country particularly with the rise in commodity prices.

The Fund pointed out in the document that in Brazil, as well as in other emerging markets such as Hungary, Mexico and Russia, their respective central banks have started to raise base interest rates to contain upward pressure on consumer price indices.

The IMF report also highlighted that Brazil and India proposed the adoption of fiscal measures to mitigate the economic consequences of “recurrent waves of infections” caused by the transmission of the coronavirus.

Early recovery

The chief economist of the IMF, Gita Gopinath, confirmed this Tuesday, 27, that the institution raised its forecast for Brazil’s growth in 2021, from 3.7% to 5.2%, and said that “the recovery”. She made the comment when answering a question by Broadcast, Grupo Estado’s real-time news system, about the Fund’s decision to reduce the Brazilian GDP forecast from 2.6% to 1.9% in 2022, in the update of the document World Economic Perspective.

“The recovery took place sooner than anticipated in 2021. Brazil is one of the countries that is benefiting from the commodity price minutes and the resumption of major trading partners such as the US and China,” said the chief economist at the IMF. “There are also setbacks, as the pandemic has not ended in the world. Brazil is going through a third wave of covid-19 that has not ended yet.” She made the statements at a press conference promoted by the International Monetary Fund.

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