Economists cut Brazil growth forecast

Monday, February 18, 2019

Brazilian economists cut their GDP growth estimate for this year after the release of figures showing disappointing growth in 2018.

They now expect GDP to expand 2.48% in 2019, according to a weekly central bank survey with 100 economists, compared to 2.50% in the prior survey.

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Last week, the monetary authority released its economic activity index, a GDP proxy known as IBC-Br, showing the economy grew 1.15% last year. In 2017, the economy expanded 1%.

Last year's performance turned out to be a major disappointment when considering the high hopes for a strong recovery at the beginning of the year.

At the start of 2018, local economists were forecasting GDP growth of around 3% but the predictions then began to gradually decrease due strong international and local market volatility, a 10-day truckers strike in May and the country's turbulent presidential election.

Meanwhile, the economists maintained their year-end inflation forecast at 3.87%, which is below the central bank target of 4.25%. They also see the bank keeping the Selic benchmark interest rate at the current level of 6.5%, which is the lowest level ever, during all of 2019.