Brazilian industry is expected to rise 2.1% next year, according to the confederation; estimates Selic rate of 12.75% in 2025
The (National Confederation of Industry) published this Tuesday (Dec 17, 2024) estimates for the Brazilian economy in 2025. It said that GDP (Gross Domestic Product) will grow 2.4% next year. Here is the report (PDF – 252 kB).
In December 2023, the CNI said the Brazilian economy would grow by 1.7% in 2024. Today, the most recent projection is for a rise of 3,5%.
Industry GDP is expected to rise 2.1% in 2025 compared to. The rate is lower than expected for 2024 by the CNI: 3.3%. (Click to open in another tab).
According to the CNI, Brazil’s investment rate will rise from 17.3% in 2024 to 17.6% of GDP in 2025.
INFLATION AND SELIC
Measured by the IPCA (Broad National Consumer Price Index), inflation is expected to be 4.8% in 2024 and 4.2% in 2025, according to CNI projections. The basic rate, the Selic, is expected to go from 12.25% per year in 2024 to 12.75% in 2025. Estimates are that they expect the base interest to be 14% at the end of next year. The CNI projects an average dollar of R$5.70 next year.
In the report, the CNI said that higher interest rates put growth in economic activity at risk. “The CNI projects that the Central Bank will choose to continue raising the Selic in the first months of 2025 until it reaches 14.25% or not and, only in the second half of 2025, will begin the path of cuts”these.
PUBLIC ACCOUNTS
The CNI said that the consolidated public sector – made up of the Union, States, municipalities and state-owned companies – will have a primary deficit of R$70.2 billion in 2025. The value corresponds to -0.6% of GDP. The fiscal target is to bring the deficit to zero next year, with a tolerance of a deficit of up to 0.25% of GDP.
According to CNI estimates, Brazil’s public debt will rise from 78.7% in 2024 to 81.9% of GDP in 2025.
The CNI said that there was “strong stimuli” in 2024 that boosted the Brazilian economy. Despite this, it led the federal government to record a new primary deficit this year.
“Even if the federal government respects the lower limit of the primary result target and the rules of the new fiscal framework, a significant deterioration in public debt is expected”, these.
For the confederation, the fiscal package presented by the government should reduce the debt growth trajectory, but is still not compatible with the goals for the coming years.
And he added: “It is necessary to move forward with more effective cost-cutting measures, since the measures presented are not sufficient to guarantee compliance with the primary result target in 2025 and in the coming years, nor do they contribute significantly to stabilizing the trajectory of the relationship debt/GDP”.
Read the CNI projections below:
