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IMF Improves Brazil’s GDP Outlook

IMF Improves Brazil’s GDP OutlookIMF Improves Brazil’s GDP Outlook

Brazil’s interim government celebrated the news that the International Monetary Fund reduced its negative outlook forecast for the country’s GDP in 2016, from 3.8% in April to 3.3% in July. The international entity also forecast a mild growth in 2017 from zero growth in its April report to 0.5% in the latest estimate.

“Consumer and business confidence appears to have bottomed out in Brazil, and the GDP contraction in the first quarter was milder than anticipated. Consequently, the 2016 recession is now projected to be slightly less severe, with a return to positive growth in 2017,” stated the forecast update by the entity, released on Tuesday. For the entity economic growth should only be expected in 2018, Yahoo reported.

The forecast for GDP growth in emerging economies as a whole remained the same as in April, 4.1% in 2016 and 4.6% in 2017.

Brazilian economic consultancies are also more positive about activity growth this year and next. In the latest Central Bank’s Focus Report survey, forecasts for GDP growth improved from a negative 3.30% to a negative 3.25% this year.

But not all have a less gloomy outlook on Brazil’s economic scenario. Last month, another international organization, the World Bank, increased the decline of Brazil’s GDP from 2.5% in January to 4% in June. According to this entity’s forecasts, in 2017 the country will still register a decline in growth (by 0.2 percent) and only start to show positive activity growth in 2018.

 Market Expectations Rise

The financial market is more optimistic about the economy of the country. According to the Focus Bulletin, a weekly publication that brings together the projections of about 100 analysts, expectations for growth and inflation improved.

Economists now expect gross domestic product 2017 growth of 1.10%. Until last week, this projection was lower, 1.0%. Among the three sectors of the economy, which should provide more expansion is agriculture.

Research shows that the field’s GDP is expected to grow 1.75% next year. The second best performance is the industry, an increase of 0.53%.Services should be 0.10% high.

The GDP of the country, however, can reach even greater numbers than those recorded this week. The most optimistic analysts polled for the Focus Bulletin project a growth of 2.84% for next year.

The evaluations for 2016 were also more favorable. To GDP, it is expected a less severe recession than projected earlier.

Just between last week and earlier, the forecast changed from a drop of 3.30% to a decrease of 3.25%. A month earlier, it had expected the country to register a downturn of 3.44%.

Financialtribune.com