Brazil’s Economy Ministry predicts 2023 GDP growth between 1.4% to 2.9%

Brazil’s Economy Ministry predicted on Wednesday a GDP growth range in 2023 between 1.4% to 2.9%, arguing that the economy’s structural growth is now higher than seen in the recent past.

The Ministry’s Economic Policy Secretariat stated in a report that the persistence of forecast errors for the Brazilian GDP in the last three years may indicate a change in the growth trend, drawing attention to the positive effects in the short term of a higher investment rate.

Officially, the government estimates a 2.5% GDP rise next year, an input used in its budget proposal sent to Congress, which is questioned for allegedly overestimating government revenues.

Private economists calculate the economy will grow by just 0.7% in 2023, according to the central bank’s weekly Focus survey.

The secretariat stated that traditional models for projections are based on past observations and, therefore, cannot respond appropriately to structural changes that have been implemented since 2016.

Among the measures in this direction, the secretariat mentioned new legal frameworks for investment in various sectors, which increased private investment.

For 2023, almost 82 billion reais ($15.9 billion) are expected in investments in partnerships and concessions, added the secretariat, an increase of 10% compared to what is forecast for this year.

The Economy Ministry’s projections incorporate an economic slowdown in emerging and developed economists throughout 2022. A recession this year and next “would significantly change expectations for next year,” highlighted the secretariat.

($1 = 5.1680 reais)