Brazil’s government keeps 2025 GDP growth forecast at 2.3% and raises inflation estimate to 4.9%. Economic growth is expected to slow later in the year. Central bank plans a rate hike amid efforts to control inflation. Preliminary forecast for 2026 sees growth at 2.5% and inflation at 3.5%.
The Brazilian government has maintained its GDP growth forecast for 2025 at 2.3%, while raising its inflation estimate slightly to 4.9% from 4.8%. This adjustment reflects minor changes in the base case scenario. The finance ministry noted that economic growth is expected to decelerate during the second half of the year following a robust expansion in the first quarter.
As part of its efforts to combat rising inflation, Brazil’s central bank is implementing a stringent monetary tightening strategy. Analysts anticipate a continuation of this trend, with a third consecutive interest rate increase to 14.25% anticipated. This proactive approach aims to stabilize economic conditions amidst fluctuating prices.
In conjunction with current projections, the finance ministry provided preliminary forecasts for 2026, predicting a growth rate of 2.5% and a decline in inflation to 3.5%. The outlook suggests a steady growth trajectory, with estimates indicating that inflation will converge towards the central bank’s target of 3% by 2027.
In summary, Brazil’s government has reaffirmed its GDP growth forecast for 2025 at 2.3% while slightly adjusting its inflation estimate upward to 4.9%. The implementation of aggressive monetary tightening by the central bank underscores efforts to address inflationary pressures. The longer-term economic outlook appears stable, with anticipated growth rates approaching 2.5% and inflation receding toward target levels in the following years.
Original Source: www.marketscreener.com