BRASILIA (Reuters) – Brazil’s economy ministry on Thursday raised its economic growth forecast for this year to 2.7 percent from 2 percent in July, after official data for the second quarter showed brisk activity.
The upbeat revision came after the April-June GDP growth unexpectedly rose by 1.2%, the ministry’s economic policy secretariat said. It added that activity will continue to grow in the second half, but at a slower pace.
“Initial July releases suggest continued growth in industry, services and labor markets. Confidence index confirms positive expectations for the third quarter, with broad expansion across sectors,” the secretariat said in a statement said in the statement.
The Ministry maintained its GDP growth forecast for 2023 at 2.5%.
Private economists estimate Latin America’s largest economy will grow 2.% this year and just 0.5% next year, driven by sharp monetary tightening by central banks policies to curb inflation.
Policy makers have pushed interest rates up to 13% from a record low of 2% in March last year. 75%.
But the ministry re-emphasized that its optimistic outlook for 2023 was supported by more private investment and record high imports of capital goods compared to GDP.
While global growth is expected to decelerate moderately, Brazil added in the Secretariat that the formal sector and increased services with higher productivity.
The ministry lowered its 2022 inflation forecast to 6.3% from 7.2% in July. For 2023, it remains at 4.5%.
