The World Bank lowered its forecast for Brazil’s 2022 GDP growth from 2.5 to 1.4 percent, according to its global economic outlook report. If expectations are confirmed, Brazil would be the lowest-performing country among 18 emerging markets — only faring better than crisis-plagued Haiti.
The bank expects sharp economic deceleration as “private consumption is expected to soften substantially in 2022 as high inflation diminishes purchasing power and labor market conditions improve only sluggishly.” In this regard, the World Bank highlights the country’s “stubbornly high” unemployment rate, which sat at more than 12 percent in the second half of 2021.
The bank also draws attention to fears about the impact of China’s slowing growth on Brazil’s commodity exports. As bad as they are, the World Bank’s projections are more optimistic than those of Brazilian market agents. Per the Central Bank’s latest Focus Report survey, Brazilian GDP is set to grow just 0.28 percent this year.