Global Barometers Signal Improvement in Early 2022

Ministry of Economy maintains GDP forecast at 1.5%

The federal government has changed its inflation forecast for this year upwards. The Broad Consumer Price Index (IPCA), which in March was estimated at 6.55% for the year, now had the forecast raised to 7.9%. The estimate of the National Consumer Price Index (INPC) rose from 6.7% to 8.10%, and that of the General Price Index (IGP-DI), from 10.01% to 11.4%. The estimate of the Gross Domestic Product (GDP) was maintained at 1.5%. The data, released today (19), are from the Macro Fiscal Bulletin of the Economic Policy Secretariat (SPE) of the Ministry of Economy.Ministry of Economy maintains GDP forecast at 1.5%

For 2023, the federal government also maintained its GDP forecast and increased that of inflation. The GDP, according to the estimate, should close 2023 with a rise of 2.5% (the same forecast of the last bulletin, released in March). The IPCA should end 2023 at 3.6% (the March forecast was up 3.25%); the INPC, at 3.7% (3.5% was the estimate in March); and the IGP-DI, at 4.57% (4.42%).

“The expectation for the inflation rate [IPCA] increased from 6.55% to 7.90% in 2022 and from 3.25% to 3.60% in 2023. As of 2024, convergence of inflation is expected [IPCA] to the 3% target. In relation to the INPC, the projection for 2022 increased from 6.70% to 8.10%”, says the text of the document.

According to the bulletin, the improvement in the performance of the Brazilian GDP has been due to the recovery in the service sector and the expansion of investments, which, according to the document, has reflected in the recovery of the labor market. The text highlights that the service sector grew 1.8% in the first quarter of 2022, reaching the highest level since May 2015.

“The Brazilian GDP growth estimate for 2022 was maintained at 1.5%. From 2023 onwards, estimates remained at 2.5%. Since March, in line with the SPE projections, an upward revision of market expectations for economic activity has been noted.

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