InterAmerican Development Bank (IDB) projects a 1.5% GDP expansion for Brazil

If confirmed, the projected economic performance for Brazil over the next three years will be slightly lower than that calculated for Latin America and the Caribbean as a whole.

The Gross Domestic Product (GDP) of Brazil is expected to grow by 1.5% in 2024, with the expansion gaining momentum in the following years to reach 2% in 2025 and 2.1% in 2026.

The projections were released on Monday by the Inter-American Development Bank (IDB) in a report on the economic outlook for Latin America and the Caribbean. Previous projections from March 2023 were for an expansion of 1.8% in 2024 and 2% in 2025.

If confirmed, the projected economic performance for Brazil over the next three years will also be slightly lower than that calculated for Latin America and the Caribbean as a whole. For the region, the IDB calculates GDP expansion of 1.6% for 2024 and 2.3% for the following two years.

The Brazilian Real didn’t immediatly reacted to the news, as caution in global markets was growing on Monday.

The most recent estimate for Brazilian economic growth for this year is lower than the latest market projections (1.77%), according to the median of the Ministry of Finance (2.2%), and the Central Bank (1.7%).

The institution warns, however, that “this reference scenario [for Latin America and the Caribbean] presents substantial risks, particularly if the growth rates” of the United States “fall below expectations.” Additionally, “the growth dynamics of China and commodity markets could also affect the region.”

Therefore, the IDB also outlines a negative scenario, in which Brazil would lose 1.6 percentage points of GDP growth annually between 2024 and 2026. Nevertheless, being “a larger and more diversified economy in terms of external linkages,” Brazil’s performance would be better than that of other countries in the region, such as Mexico.

For 2024, the IDB also positively highlights the estimate of “record oil production” in Brazil.

ABOUT THE AUTHOR See More

Gabriel Micillo

Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.

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