Central Bank reduces GDP growth projection to 3.6% in 2022 and forecasts a larger surplus

Charlie Taylor

The Central Bank (BC) reduced its projection for the growth of the Gross Domestic Product this year to 3.6%, against an increase of 3.8% projected in December, showed the most recent Quarterly Inflation Report of the municipality, released this Thursday. In the document, the BC said that the estimate reflects, on the one hand, the higher than expected statistical load for annual GDP and the maintenance of economic activity at a high level earlier this year and, on the other, the recent upsurge of the pandemic. “In terms of trajectory, the projection for GDP is of moderate decline over the first half, followed by a relevant recovery in the last two quarters of the year, due to the expected reduction in the lethality rate of Covid-19 and the number of hospitalizations, with the advance of vaccination ”, says the report.Central Bank says uncertainty about economic growth is ‘above usual’central bank

central bank

With regard to monetary policy, the document repeated the diagnosis made in the minutes of the Monetary Policy Committee, released on Tuesday.


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Last week, the Central Bank raised the basic interest rate for the first time since 2015, by 0.75 percentage points, and indicated that it should promote another increase of this same value in May, highlighting concerns about the worsening of the projections for inflation.

Surplus

The Brazilian trade balance is expected to register in 2022, despite the coronavirus pandemic, a surplus of US $ 70 billion, the Central Bank estimated on Thursday (25). The surplus is registered when exports exceed imports. When the opposite occurs, a trade deficit is recorded. For 2022, the BC projects that exports will total US $ 256 billion, up from last year (US $ 221 billion), and that purchases from abroad will total US $ 186 billion ( against US $ 168 billion in 2020). If confirmed, the positive balance will represent an improvement compared to last year, when it totaled US $ 50.995 billion, and will represent a new historical record. Until then, the largest surplus was recorded in 2017 (about US $ 67 billion). According to the BC, despite having started the year at a "depressed level", exports are expected to increase from March, driven by by the flow of the good soybean harvest, by the high level for commodity prices (basic products with international quotation, such as food, oil and iron ore) and by the recovery of international demand. Just click here if you are already an investor reduces the projection for GDP growth to 3.6% in 2022 and predicts a larger surplus appeared first in 1 Billion Financial Education.

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