BRASILIA (Reuters) – Brazil’s Finance Ministry raised its economic growth forecast on Friday to 3.2% for this year, projecting an acceleration compared with 2023, reflecting the resilience of Latin America’s largest economy.
The ministry’s economic policy secretariat calculation marks a sharp upward revision from the 2.5% estimate in July, incorporating both the positive surprise in second-quarter activity and expectations of stronger performance for the rest of the year, albeit at a slower pace.
In 2023, Brazil’s GDP grew by 2.9%.
The new projection, which will serve as input for the government’s bi-monthly revenue and expenditure report due next week, is more optimistic than private economists’ 2.68% expansion forecast in the central bank’s weekly survey.
Earlier on Friday, a central bank index showed better-than-expected economic activity in July, continuing a series of robust indicators supported by a strong labor market.
The scenario has strengthened bets that the central bank will begin a tightening cycle next week, hiking interest rates by 25 basis points after holding them at 10.5% for two consecutive policy meetings.
The Finance Ministry also adjusted its inflation forecast for the year to 4.25%, up from the previous 3.9%, approaching the upper limit of the official target of 3%, with a tolerance range of 1.5 percentage points.
For 2025, the ministry’s economic policy secretariat slightly lowered its projected GDP growth to 2.5% from 2.6% and raised the expected inflation rate to 3.4%, up from the previous estimate of 3.3%.