The Central Bank increased the growth forecast for the country’s Gross Domestic Product (GDP) this year from 1% to 1.7%.
The information disclosed this Thursday (23) in a presentation made by the director of Economic Policy at BC, Diogo Guillen.
GDP is the sum of all goods and services produced in the country and is the main indicator used to measure the evolution of the economy.
- Special g1: understand what is GDP
The Central Bank’s forecast for the growth of the Brazilian economy exceeds that released by the federal government. According to the projections of the Ministry of Economy, the GDP should grow 1.5% this year.
In the presentation made by Guillen, the BC explains that the projection has increased due to the positive result in the first half of the year.
The institution states that “the positive surprise in GDP in the 1st quarter and the forecast of a new high in the second increase the statistical load for 2022”.
According to the Brazilian Institute of Geography and Statistics (IBGE), the Brazilian economy grew 1% in the first three months of this year (see details in the video below).
Service sector and household consumption drive the 1% rise in GDP
For the second half of this year, the Central Bank expects a slowdown in economic activity.
According to the Central Bank, uncertainty remains higher than usual due to the war in Ukraine and the growing risks of a slowdown in the global economy.
The BC also assesses that, from the perspective of the offer of products and services, the increases in forecasts for industry and services stand out for the year, reflecting, especially, the result in the 1st quarter and the expected for the second quarter.
On the demand side, the BC highlights the projected increase in household consumption and the projected decline in investments.
In addition to GDP, the Central Bank updated other projections for this year:
- Trade balance: the forecast is for a surplus (exports exceeding imports) and went from US$ 83 billion to US$ 86 billion;
- Bank credit: went from 8.9% to 11.9%;
- External accounts: went from US$ 5 billion to US$ 4 billion.
Listen to the podcast episode The subject on “Armed Storm in the World Economy”: