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Economy

Government raises Brazil’s predicted GDP growth to 2.7%

The forecast for the inflation went from 7.2% to 6.3%
Andreia Verdélio
Published on 15/09/2022 - 13:41
Brasília
economia ilustração 2
Foto: Marcello Casal Jr/Agência Brasil/Arquivo
© Marcello Casal Jr/Agência Brasil/Arquivo

Brazil’s Ministry of Economy has raised the projection for the country’s economic growth this year, while the estimate for inflation has been lowered. The numbers were announced today (Sep 15).

The estimate for the increase in the gross domestic product (GDP) went from two to 2.7 percent from July, reflecting the expansion in employment, the performance of services and the rise in the investment rate.

The labor market is reported to have grown, as the unemployment rate slipped to 9.1 percent in the quarter ended in July and the number of employed people reached almost 100 million, a record in this time series, which began in 2012. The figures come from official statistics agency IBGE.

As for investment, the gross fixed capital formation grew 4.8 percent from the previous quarter in the latest national accounts. Furthermore, indicators for the services sector have had a yearly surge of nearly 4.5 percent in the last three quarters.

GDP

In the first half of the year, the GDP went up 2.5 percent. In 2021, the nation’s GDP should rise 4.6 percent to BRL 8.7 trillion. The ministry expects the economic activity to continue improving later into the year: “The first data for the month of July suggest that the industry, services, and labor market continue to grow.”

Inflation

The projected inflation—as gauged by benchmark price index IPCA—for 2022 sank from 7.2 to 6.3 percent, but it is still above the inflation target for the year, set by the National Monetary Council at 3.5 percent, with a tolerance interval of 1.5 percentage points up or down. In other words, the lower limit is two percent and the upper limit is five percent.

Year to date, the IPCA is up 4.39 percent, compared to 8.73 percent in the 12 months prior.