Banks raise GDP growth forecast to up to 2.5% in 2022

Bradesco and BNP Paribas revised their forecasts for Brazil’s economic growth this year. Bradesco raised its estimate of an increase in Gross Domestic Product (GDP) from 1.8% to 2.3% and BNP, from 1.5% to 2.5%. Reports from both institutions point out that the change reflects positive surprises for domestic activity, the labor market and more fiscal stimulus.

“The extraordinary withdrawal of the FGTS between May and June and the heated job market must have driven the increase in family consumption in the period”, says a Bradesco report. “The measures recently approved by the National Congress, such as the increase in Auxílio Brasil and tax subsidies, should sustain a still positive variation in the third quarter, postponing the deceleration that we previously expected”.

Given the better-than-expected performance of the economy and the recurring surprises with the job market, Bradesco forecasts a drop in the unemployment rate to 8.0% at the end of the year.

The BNP report mentions the rapid growth of the labor market, with the generation of more than 1.3 million formal jobs in the year to June, and the unemployment rate. “That said, real wages remain lower than 2020, which suggests there is no pressure on the labor market. We hope to see more improvements before a reversal in 2023”, states the report signed by Laiz Carvalho (economist from Brazil) and Gustavo Arruda (research director for Latin America).

world scenario

The BNP also says that the world scenario, such as high inflation, high interest rates and low growth, which will be the main characteristics of the global economy for some time, will continue to impact Brazil.

“While global growth and higher commodity prices have benefited Brazil’s economy this year, we believe these two factors will provide less help in the future,” the report states. The document states that commodity prices are expected to remain high from pre-pandemic levels, but will likely have limited room to rise much further.

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About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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