Forecasts improve for Brazil’s 2019, 2020 GDP

Brazil’s gross domestic product (GDP) is expected to grow 1.1 percent this year and 2.3 percent in 2020, as per forecasts by the Institute for Applied Economic Research (IPEA), released in Rio de Janeiro today (Dec. 19).

IPEA’s previous projection was a 0.8% expansion in 2019. For 2020, the GDP was revised from 2.1 to 2.3 percent.

The estimate is near the one published by the Central Bank, in Brasília. Central Bank's prediction for the increase in the country's 2019 GDP went from 0.9 percent, as predicted in September, to 1.2 percent. For 2020, the forecast was revised from 1.8 to 2.2 percent.

The recovery of the economy gained momentum in the last few months, IPEA reported, chiefly as a result of consumption among families and investment.

José Ronaldo Souza, IPEA director for Studies and Macro-Economic Policies, argued that the more optimistic scenario for 2020 is based on two factors: the reduction in the interest rate following a lower benchmark interest—the Selic rate currently stands at 4.5 percent a year—and the advancement of the agenda with the tax, administrative reforms and the so-called federative pact.