CNI: GDP should grow 2.4% in 2025; entity projects economic slowdown

According to projections from the National Confederation of Industry (CNI), the country’s economy is expected to grow 2.4% in 2025. The projection makes up the report Brazilian Economy 2024-2025released on Tuesday (17). According to the confederation, factors such as rising interest rates, slower developments in the job market and a reduction in the fiscal impulse of governments in all three spheres should influence the slowdown in growth.

“The biggest factor of concern and containment of the economy for next year is monetary policy, the rise in interest rates”, stated the superintendent of economics at CNI, Mario Sergio Telles.

The entity also predicts that the Central Bank will continue with the monetary tightening policy until mid-2025, with the Selic rate projected to end the year at 12.75%.

Regarding the cycle of rising interest rates, which should be maintained in the first quarter of 2025 until reaching 14.25%, the entity points out that the upward movement will cause several effects, also implying the granting of credit.

Mario Sergio Telles highlighted that the rules of the new fiscal framework and the government’s reduction package reduce the fiscal impulse. In addition, regional governments must also reduce fiscal stimulus by 1.5%. CNI’s projections for next year consider the package of fiscal adjustment measures presented by the government in the order of R$22 billion.

“Next year’s fiscal policy will be more in line with the movement expected by monetary policy to reduce growth in domestic demand,” said Mario Sergio Telles.

Projections for 2025

For the president of the CNI, Antonio Ricardo Alban, the scenario for the Brazilian economy next year is worrying.

“I would say that I hope that we are wrong, and I hope that we are surprised again with the economy in 2025, as everyone was surprised in 2024, in some way in 2023, but we know that some scenarios are more worrying for 2025 in today’s reality”, assessed the president at a press conference.

According to the CNI report, agriculture should recover from the drop predicted for 2024 (2.7%) and grow 4.2% in 2025. The entity states in the document that a resumption of agricultural production is expected next year, with a harvest forecast indicating an increase of 5.8% compared to this year, according to IBGE’s Systematic Survey of Agricultural Production (LSPA).

The services sector is expected to increase by 1.9%, less than in 2024, whose projected increase was 3.7%. The report points out that the drop is due to lower demand.

Due to the reduction in growth in domestic demand, the report points out that the industry is expected to grow 2.1% in 2025. Furthermore, the manufacturing industry is expected to rise 2% – if the projection is achieved, it will be two consecutive years of rising prices. sector.

The CNI also points out that the IPCA should close 2024 with an increase of 4.8%, 0.3 percentage points above the target ceiling of 4.5%. The entity also estimates that inflation will slow down and close 2025 at 4.2%.

According to the CNI, the job market will continue to grow strongly in 2024, with a projected growth of 7.2%, compared to 6.9% in 2023. In 2025, the job market is expected to grow less, with a projection of 1.2%. % for the number of employed people and 3.3% for the real income mass next year.

Source: Industry News Agency

Projections for 2024

For 2024, the confederation raised its GDP growth expectation to 3.5%, double the estimate announced at the end of last year, which was 1.7%.

The CNI also projects that the industry should grow 3.3% this year. The manufacturing industry is expected to rise 3.5%. And services are expected to grow 3.7%.

“Despite the unfavorable exchange rate, imports are expected to register an increase of 10.6% in 2024, compared to last year”, says the CNI document.