The Conjuncture Group of the Directorate of Macroeconomic Studies and Policies of the Institute of Applied Economic Research (Ipea) revised the growth projection of the Brazilian Gross Domestic Product (GDP, sum of all goods and services produced in the country) for this year 2, 2% to 3.3%. For 2025, the estimate went from 2.3% to 2.4%.
Contrary to what could be projected in June, the impacts of the floods in Rio Grande do Sul on aggregate GDP appear to have been exhausted in the short term, explains the document. According to cyclical indicators from the Brazilian Institute of Geography and Statistics (IBGE), the floods only generated volatility throughout the second quarter, with sharp drops in May, followed by strong increases in June.
Driven by the good evolution of the job market and better conditions for access to credit, the performance of sales of goods and services to families was maintained throughout 2024, and continues to be the main driver of the economy, explains Ipea.
After a disappointing year of 2023, demand for capital goods also stood out positively, boosting a recovery seen in the manufacturing industry, albeit at a still modest pace. As a consequence, in addition to the good performance of domestic production, imports continue to expand, a fact also evidenced by the faster growth in the apparent consumption of industrial goods, in relation to physical production. Exports, with an important contribution to GDP growth in 2023, have been showing some slowdown.
However, some factors indicate less robust growth for the second half of this year, compared to the first half. While the Central Bank began a cycle of increasing interest rates in September, the fiscal impulse on the part of the government tends to be smaller than what happened previously. Regarding the financial situation of families, although the mass of income continues to record real gains, the trajectory of some price indices, notably in the services sector, has become less favorable, says the study.
Although inflation in 12 months still shows a tendency to decelerate compared to that observed in 2023, the current situation reveals that this disinflation process tends to be slower than previously projected. Therefore, explains Ipea, the expectation for the coming months is a slight acceleration in inflation in 12 months, although lower than the 4.6% observed in 2023.
