Brazil’s Finance Minister describes GDP as surprising and highlights improvements in investment
Finance Minister Fernando Haddad stated today that the Gross Domestic Product (GDP) result for 2023, which recorded growth of 2.9%, exceeded expectations.
Finance Minister Fernando Haddad stated today that the Gross Domestic Product (GDP) result for 2023, which recorded growth of 2.9%, exceeded expectations. ‘Even if the government was more optimistic than the market, the government’s projection of around 2% was surprising,’ he said. The minister believes that growth this year should be around 2.2%.
The minister pointed out that last year’s GDP growth did not slow down, as was estimated, and still remained close to 3%. ‘This instills confidence in the Brazilian economy,’ he told in the conference. In the fourth quarter, the GDP remained stable compared to the third.
What also caught the minister’s attention was the slight improvement in gross capital formation in the fourth quarter. Despite the sector recording a 3% decline for the year, he emphasizes that ‘we need investments to drive the economy.’
He believes there is room for the Brazilian economy to grow this year, and that monetary policy will help. ‘We are starting the year with interest rates much higher than we would like, but 2.5 percentage points below the beginning of last year,’ he said. ‘Looking at these variables, we have good room to grow this year if Congress listens to the Treasury, and we continue to correct the public accounts that were disorganized.’
According to Haddad, the growth projected by the ministry is more structural, especially due to domestic efforts to tidy up the house and the ‘good winds that should start blowing in monetary policy abroad,’ referring to the interest rate cuts that the US Federal Reserve is expected to begin in the middle of the year.
Haddad stated that despite the marginal improvement in the fourth quarter of the year, Gross Fixed Capital Formation, which measures investments in GDP, was the variable that least kept pace with GDP evolution throughout the year, with a decline of 3%. He emphasized, however, that the government wants to create a business environment for entrepreneurs to invest heavily.
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