World Economy

IMF Cuts Brazil Growth Outlook

IMF Cuts Brazil Growth OutlookIMF Cuts Brazil Growth Outlook

Brazil’s economy appears to have turned a corner, but political uncertainty is on the rise, prompting the International Monetary Fund on Thursday to cut its 2018 growth forecast for the recession-hit country, AFP reported. The recovery is likely to be “subdued” because “a recent rise in political uncertainty has cast a shadow over the outlook,” the fund said in its annual review of the Brazilian economy. The IMF now forecasts growth rise to 0.3% this year—a slight increase from the 0.2% estimate in April, and a dramatic improvement over the 3.6% contraction last year. But the IMF cut the growth outlook for 2018 to 1.3% from 1.7% in its April report. The economy is expected to expand by 2% in 2019 and subsequent years. “Brazil’s deep recession appears close to an end,” the report said, acknowledging the “ambitious reform agenda” of President Michel Temer’s government. The IMF cautioned that “the government’s ability to deliver on social security reform, a necessary step toward securing fiscal sustainability, has become more uncertain—and, with national elections scheduled for 2018, the window for legislative action is closing.”

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