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Brazil: Ministry of Finance improves GDP projections for 2017 and 2018

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Staff Writer | December 15, 2017
Brazil central bank
LatAm   Data from the Ministry of Finance

In the wake of recovering growth and rising confidence, the Brazilian economy is expected to grow more this and next year, than previous forecasts had expected.

Data from the Ministry of Finance points to Gross Domestic Product (GDP) growth of 1.1% in 2017 and 3% in 2018.

Earlier forecasts indicated more moderate growth, of 0.5% and 2%, respectively. The figures were released by Finance Minister Henrique Meirelles and Secretary of Economic Policy Fabio Kanczuk.

“There is a very large increase in confidence that has also influenced the economic trajectory [of the economy] this year, as a result of fiscal control, approval of the spending ceiling, approval of reforms in general and all discussions underway," the minister assessed.

This set of factors contributed to increase confidence in the economy. With the fall in inflation and interest rates, companies recovered and families started to consume again.

In the third quarter of this year, GDP - i.e. the sum of all wealth produced by the country - grew 1.4% in comparison with the same period last year. For the minister, this is a clear demonstration that the crisis is now behind us.

Meirelles also reinforced the need to approve Pension Reform as a way to consolidate the growth estimates and generate positive effects in the Brazilian economy.

He indicated that the forecasts may change depending on the completion of changes in social security rules.

In recent days, the Brazilian government, businesspeople and parliamentary leaders have reinforced the importance of approving Pension Reform, which is currently under review in the Chamber of Deputies.


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