Economy Ministry maintains projection for 2022 GDP

The Economy Ministry kept its estimates for this year’s GDP at 1.5 percent and forecasts for 2023, 2024, 2025, and 2026 at 2.5 percent. In its latest macroeconomic report, the ministry justified not changing its projections as it noted “a bullish revision of market expectations for economic activity.”

This upward revision is due, according to the text, to the recovery in the service sector and the expansion of investments, which, in turn, is reflected in a labor market recovery.

The ministry, however, said that “external risks must be monitored, especially the war in Ukraine and its impacts on global value chains.”

In recent weeks, several banks have revised their projections of economic activity upward for this year. On Thursday, for example, it was XP’s turn to double its expectations for the economy this year from 0.8 to 1.6 percent. 

However, for next year the situation is the opposite, with financial institutions revising their forecasts downwards due to the likelihood of a negative statistical carryover from this year, with the impacts of tighter monetary policy being felt on activity from the second half of the year onwards.