The International Monetary Fund (IMF) raised the growth projection for the Brazilian economy this year from 2.1% to 3%. Despite the improvement in expectations for this year, the fund estimates a slowdown for 2025, with growth falling from 2.4% to 2.2%.
Estimates for 2024 are below official forecasts. The Economic Policy Secretariat of the Ministry of Finance projects growth of 3.2% this year.
The IMF updated growth forecasts for all countries during the body’s annual meeting, which takes place in Washington this week. According to the Fund, the Brazilian economy will grow more than expected due to better than expected results in the first half of the year, the strong job market, inflation under control and rising income. The IMF also cited a smaller than expected impact of the floods in Rio Grande do Sul on the Gross Domestic Product (GDP).
For 2025, however, the outlook is less optimistic. The IMF justified the reduction in growth estimates due to the reduction in fiscal stimulus granted since last year and high interest rates. Rising since September, the Selic Rate (the economy’s basic interest rate) is at 10.75% per year and is expected to end 2024 at 11.75% per year according to the Focus bulletin, a weekly survey by the Central Bank of market analysts.
Only on December 3, the Brazilian Institute of Geography and Statistics (IBGE) will release the GDP for the third quarter. In the second quarter, the Brazilian economy grew 1.4% compared to the previous three months, above all estimates.
