The International Monetary Fund (IMF) reduced its projection for Brazil’s GDP growth this year to 2.1 percent, citing impacts of the recent climate tragedy in Rio Grande do Sul. However, the IMF forecasts a growth of 2.4 percent for next year, driven by reconstruction efforts in the state and an increase in hydrocarbon production.
Domestic analysts remain steady in their projections, expecting a minimal impact from the tragedy on Brazil’s overall economic performance. The IMF expects the reconstruction efforts to have a positive long-term impact on the economy.
This adjustment in Brazil’s projections also led to a reduction in the growth forecast for Latin America and the Caribbean this year. Globally, the IMF maintains a growth projection of 3.2 percent in 2024 and 3.3 percent in 2025, highlighting challenges in monetary policy normalization due to services inflation.
Other international organizations like the OECD and World Bank also provide similar growth forecasts, aligning with the IMF’s projections for Brazil.
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