Market raises projection for 2024 to 2.46%
-
Loading... - Freya Hahn
- 02 Sep 2024
- 80 Views
- 0 Like
- 0 Comment
The financial market has slightly raised its forecast for Brazil's economic growth in 2024, now predicting a 2.46% expansion, up from the previous estimate of 2.43%. This optimistic outlook is based on the Central Bank's latest Focus Bulletin, a weekly report that gathers projections for the country’s main economic indicators.
For 2025, the projected GDP growth stands at 1.85%, while for 2026 and 2027, a steady expansion of 2% is anticipated for both years. These projections follow a 2.9% growth in 2023, which exceeded initial expectations, according to data from the Brazilian Institute of Geography and Statistics (IBGE).
The forecast for the exchange rate sees the US dollar valued at R$5.33 by the end of 2024, slightly decreasing to R$5.30 by the end of 2025.
Inflation, measured by the Broad National Consumer Price Index (IPCA), is expected to rise to 4.26% in 2024, slightly above the Central Bank’s target range but still within tolerance limits. The target inflation rate is 3%, with an allowable range of 1.5 percentage points above or below, meaning the upper limit is 4.5%.
For 2025, inflation is projected to be 3.92%, with further reductions to 3.6% in 2026 and 3.5% in 2027. Starting from 2025, a continuous target system will be implemented, with the inflation target remaining at 3% but with the same tolerance margin.
The Central Bank’s Selic interest rate, currently at 10.5% per year, is expected to remain unchanged through 2024. It is anticipated to drop slightly to 10% in 2025 and continue decreasing to 9.5% in 2026 and 9% in 2027. This follows a period of rate stabilization after a cycle of rate cuts that began in August 2023.
The next Monetary Policy Committee (Copom) meeting is scheduled for September 17-18, where the current economic situation will be reassessed, particularly in light of ongoing global uncertainties and domestic economic conditions.
