Brazil’s government has retained its GDP growth estimate at 2.3% for 2025, while revising its inflation projection to 4.9%. The central bank is expected to raise interest rates to combat inflation. Preliminary estimates for 2026 predict growth at 2.5% and inflation easing to 3.5%.
On Wednesday, Brazil’s government reaffirmed its economic growth forecast for 2025 at 2.3%, while slightly adjusting its inflation estimate to 4.9%, up from an earlier forecast of 4.8%. The increase is attributed to minor adjustments in the base case scenario. This forecast comes in light of expected slowing growth in the latter half of the year following an expansion in the first quarter.
Additionally, Brazil’s central bank continues to implement a stringent monetary policy aimed at curbing inflation, with expectations of a third consecutive 100-basis-point interest rate hike, bringing the rate to 14.25%. In its report, the government expressed concerns over inflation, noting the expected moderation of food prices alongside a rise in the costs of industrial goods.
The finance ministry also provided preliminary estimates for 2026, projecting growth to reach 2.5% while forecasting inflation to decline to 3.5%. The ministry indicated that a sustained growth rate of approximately 2.5% should be expected in the forthcoming years, with inflation anticipated to align with the central bank’s target of 3% by 2027.
In summary, Brazil’s government maintains its GDP growth forecast at 2.3% for 2025, with a slight increase in inflation expectations to 4.9%. The central bank’s tightening measures aim to control inflation while upcoming forecasts suggest gradual improvement in economic conditions and inflation rates aligning with targets in subsequent years.
Original Source: money.usnews.com
