Brazil: Economic Boom and Improved Forecasts for the World’s Ninth-Largest Economy

The Latin American country, which unexpectedly raised its GDP by 2.9% in 2023, will grow by 2.2% in 2024, according to the IMF, surpassing initial forecasts.

The largest country in Latin America became the world’s ninth-largest economy in 2023 due to an unexpected 2.9% increase in its Gross Domestic Product (GDP). This unforeseen rise prompted the International Monetary Fund (IMF) to raise its outlook for the country. However, the economic boom contrasts with the growing lack of security and increasing political distrust, some of the challenges the nation now faces.

A year later, despite ongoing social polarization between political factions, the situation has been stabilizing, and the Brazilian economy has managed to navigate these differences, overtaking Russia for the ninth spot in the global economic rankings in 2023. Specifically, the country’s GDP reached €1.9 trillion, triple the forecasted amount at the end of 2022. The agriculture, oil, and services sectors spearheaded this growth.

One of the drivers of growth has been the increase in exports, leveraged by a cheaper Brazilian real compared to the dollar. This year, the Brazilian currency has depreciated by approximately 12%.

Meanwhile, the government has revised its projection for Brazil’s economic growth in 2024 from the 2.2% expected last March to 2.5%, as per the Macrofiscal Bulletin released by the Ministry of Finance.

The Ministry acknowledged that their new calculations do not yet consider the impacts of the unprecedented floods in southern Brazil, which have resulted in 152 deaths and displaced 2.3 million people, submerging vast areas of crops and halting factories in the region.