After the Central Bank’s Economic Activity Index (IBC-Br) suggested Brazil is on the cusp of a technical recession, the Economy Ministry published new forecasts for the country’s GDP. It pushed 2021 growth expectations down from 5.3 to 5.1 percent, and from 2.5 to 2.1 percent for next year.
The government is also anticipating higher inflation rates, with the IPCA benchmark consumer price index set to end the year at 9.7 percent. While below the current 10.67 percent, the forecast is still almost two full percentage points above the previous edition of its Macrofiscal report. Food products, fuels, and energy bills are the main inflation drivers, says the government.
The Economy Ministry lists a few risks that could further push down GDP growth, such as the water crisis and a possible worsening of the pandemic situation.