IMF increases economic growth in Brazil to 2.3%

The International Monetary Fund () raised, on Thursday (17), its prediction of economic growth to OA 2.3% this year and hopes that inflation will reach 5.2% by the end of 2025. The improvement in forecast is good news for the president’s government, days after threatening the country with 50% tariffs over its products from August 1.

“The Brazilian economy has grown hard in the last three years, surprising positively,” said the IMF executive board in a statement, validating the periodic evaluation of the member countries by the Fund team, known as article IV. “Growth should decrease from 3.4% by 2024 to 2.3% by 2025 amid restrictive monetary and financial conditions, reduced fiscal support and greater global political uncertainty,” he said.

In its last forecast update last April, the international financial organization had foreseen a 2%growth. In the medium term, the IMF expects growth to “recover up to 2.5%” due to monetary policy and other factors, such as implementing tax reform “to improve efficiency and accelerate hydrocarbons production”. Inflation will be 5.2% at the end of the year, according to the fund, and will then fall “gradually towards the goal of 3% until the end of 2027”.

The IMF praised the rigidity of monetary policy in September 2024. “It was appropriate and consistent with the weight of inflation and expectations of inflation return to the goal of 3%,” he says. “The authorities are progressing in their sustainable and inclusive growth agenda,” the statement says. The directors also praised “the reduction of unemployment and poverty in recent years”, as well as “progress in structural reforms”.

The IMF points to negative risks “such as the recent increase in global political uncertainty and the escalation of commercial tensions” amid the tariff offensive of the president of the United States, against their partners.

*With information from AFP

Posted by Nátaly Tenório