Brazil government to hold 2024 GDP forecast at 2.2%, sources say

By Thomson Reuters Mar 15, 2024 | 9:16 AM

By Marcela Ayres and Bernardo Caram

BRASILIA (Reuters) – Brazil’s Finance Ministry next week will stick to its official projection for gross domestic product (GDP) to grow 2.2% this year, two ministry officials said on condition of anonymity.

The data is expected next Thursday when the Economic Policy Secretariat unveils its latest economic parameters, used to estimate federal revenues and expenses in a bimonthly report.

The report is closely watched for an assessment of the government’s goal to erase its primary deficit this year, still viewed skeptically by the market, which projects a deficit equivalent to 0.8% of GDP.

After a strong year for farm output in 2023, authorities monitoring the calculations said the sector is expected to contribute less to economic growth this year. The government expects that effect to be offset by a rebound in fixed investments and industrial production, added the sources.

The 2024 budget was ratified based on anticipated growth of 2.26% this year, so 2.2% growth would have little impact on revenue compared to the government’s initial forecasts.

Last year, Brazil’s economy grew 2.9%.

The ministry’s other projections for variables such as inflation and the Selic benchmark interest rate, will have “marginal” adjustments, said one of the sources.

(Reporting by Marcela Ayres and Bernardo Caram; Editing by Chizu Nomiyama)