Central Bank: Brazil GDP to grow 1.7% in 2022

Brazil’s Central Bank has projected a 1.7 percent increase in the country’s gross domestic product (GDP) in 2022. The previous forecast, from March, had been one percent.

The revision was unveiled today (Jun 23) by Central Bank Economic Policy Director Diogo Abry Guillen at a press conference attended by bank President Roberto Campos Neto.

The announcement comes as a preview of the quarterly inflation report, postponed until June 30 due to a strike of Central Bank employees.

Expected by the Central Bank is “cooled-down activity in the second half of the year,” as a result of “the cumulative effects of monetary tightening, the persistence of shocks on supply, and anticipated governmental payments to families for the first half.”

As the top components of domestic demand, Guillen mentions the rise in household consumption and the decline in investments.

Inflation

The Central Bank raised the projections for inflation over the next three years. For 2022, the projected National Broad Consumer Price Index (IPCA), which sets Brazil’s official inflation, went from 6.3 percent in March to 8.8 percent. The center of the target set by the National Monetary Council for this year is 3.5 percent, with a tolerance margin of 1.5 percentage points up or down.

For 2023, with its 3.25 percent target, the Central Bank projects inflation at four percent, up from the 3.1 percent published in March. For 2024, with a target set by the committee at three percent, the projections went from 2.3 to 2.7 percent.