2025 budget projects 2.64% growth for Brazilian economy

The 2025 budget bill has revised estimates for gross domestic product (GDP) growth, inflation, and other economic parameters for the coming year, compared to those in the Budget Guidelines Law.

The bill, sent to Congress on Friday (Aug. 30), revised the GDP growth projection from 2.8 percent in the Budget Guidelines Law to 2.64 percent. GDP represents the total value of goods and services produced in the country.

For the Broad National Consumer Price Index (IPCA), which gauges the country's official inflation, the forecast for next year has increased from 3.1 percent to 3.3 percent. This is slightly above the 3 percent target set by the National Monetary Council. However, with a tolerance margin of 1.5 percentage points, inflation could range from 1.5 percent to 4.5 percent next year without exceeding the target. As of July, the IPCA had an accumulated rate of 4.5 percent over the past 12 months, precisely at the upper limit of the target range.

Other parameters have also been revised. The budget bill now projects that the Selic Rate (the economy's basic interest rate) will average 9.61 percent per year by the end of 2025, up from the 8.05 percent forecasted in the Budget Guidelines Law. Additionally, the forecast for the average exchange rate has increased from BRL 4.98 to BRL 5.19 per dollar.

The text sent to Congress estimates the average price of a barrel of oil—used to project the Union's revenue from royalties—at $80.79 for next year. It also forecasts a 7.84 percent increase in the nominal wage bill.