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24/07/2017 - 19:02hs

IMF reports improved forecast for Brazilian economy

The Fund revised its forecasts from April’s World Economic Outlook and now estimates a 0.3% GDP growth in Brazil this year, against the previous 0.2%. To Latin America, the numbers worsened but are stronger than 2016’s.

São Paulo – In reviewing is forecasts made in April, the International Monetary Fund (IMF) improved the estimate made for the Brazilian economy in 2017. The Fund, who reported an expected growth of 0.2% for the country’s Gross Domestic Product (GDP) this year, now forecasts a 0.3% growth. For next year, however, the forecast was revised down, from 1.7% to 1.3%.

According to the report made available this Monday (24), the increase in political uncertainty will delay the economy’s recovery. “Brazil’s growth forecast for 2017 is now higher in light of the strong first quarter, but ongoing weakness in domestic demand and an increase in political and policy uncertainty will be reflected in a more subdued pace of recovery, and hence in lower projected growth in 2018,” states the IMF.

The World Economic Outlook makes projects for the global economy. The IMF kept unchanged its forecast for the global economy’s growth, at 3.5% this year, and at 3.6% in 2018. However, the stability doesn’t reflect the reality of each region. The United States economy’s forecasts worsened against April’s, while the Euro zone, Japan and China should beat expectations and improve growth.

The Fund points out that although the numbers in the forecasts for the global economy in 2017 and 2018 are stronger than those of 2016 (increase of 3.2%), they are below the averages previous to the crisis, especially the developed countries and commodity-exporting emerging nations. The IMF says that the results of Brazil, China, Mexico, Canada, France, Germany, Italy and Spain were better than expected in Q1.

For the emerging economies, the fund expects a 4.6% growth this year, a 0.1 percentage point improvement against April’s forecasts. The improvement should come from commodities importers, but also reflects a gradual improvement over 2015 and 2016 among exporters of basic goods.

Latin America should recover over 2016 this year and the next due to the exit of recession by countries such as Argentina and Brazil. The IMF forecasts a 1% growth for the Latin American economy this year and of 1.9% in 2018. Despite the improvement in comparison to last year, the forecast worsened against the one from April.

The growth expected from the Middle East, North Africa, Afghanistan and Pakistan should worsen in 2017 in comparison to last year due to the deceleration of the oil-exporting countries’ economies. For 2018, a recovery is expected. The forecasts remained practically unchanged in comparison to April’s, with 2.6% growth this year and 3.3% in 2018.

*Translated by Sérgio Kakitani

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