Government lowers GDP outlook to 0.8% in 2015

The government has further decreased its forecast for Gross Domestic Product (GDP) growth in 2015. A document submitted Thursday (Dec. 4) by the Ministry of Planning, Budgeting, and Management (MPOG) to the Congress Committee on Budgets reports the outlook for economic growth next year stands at 0.8%. The previous forecast was 2%.

The new forecast will be incorporated into the 2015 Budget Directive (LDO), which is being discussed in Congress.

The new estimate is close to that of the financial market. According to the FOCUS bulletin, a weekly survey of financial institution perspectives conducted by the Central Bank, a GDP growth of 0.77% is expected by the banking and financial sector in 2015.

Last week, Joaquim Levy, who will be the Finance Minister in Rousseffs next administration starting in 2015, announced the country will need to save 1.2% of its GDP (primary surplus) to pay off its government debt. This translates into $25.7 billion according to revised MPOG estimates. Out of this total, the government will have to contribute $21.4 billion (1% of GDP), and the remaining $4.2 billion (0.2%) will be up to state and local government savings.

Translated by Mayra Borges

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