Welcome to “Number of the Week,” where we choose a single figure that helps understand what is going on in Brazil. This week, we show why markets’ expectations for Brazil are growing less optimistic.
- 2.1%
- GDP growth forecast for 2022
Brazil’s Central Bank held a private meeting with analysts from 42 institutions to assess markets’ concerns regarding next year’s macroeconomic indicators. Analysts believe that the economy is moving into an election-year rhythm, which should lead to greater pressure for more public spending, putting the fiscal side at risk.
In addition, high inflation and interest rate increases, plus the devaluation of the Brazilian real against the dollar, may make the growth scenario for 2022 even more challenging.
Markets’ perception though is that, with high inflation, the Central Bank should increase interest rates further....
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