ECLAC cuts Brazil’s growth forecast for this year to 0.8%

The Brazilian economy will grow a little less than expected this year, announced this Thursday (20) the Economic Commission for Latin America and the Caribbean (ECLAC). The agency reduced the growth projection of the Brazilian Gross Domestic Product (GDP, sum of goods and services produced in the country) from 0.9% to 0.8%.

One of the five regional economic commissions of the United Nations, ECLAC revised the projections for 2023 for the Latin American and Caribbean economies, presented in December. The region’s economy will expand by 1.2% in 2022, against a previous forecast of 1.3%.

Other countries had the worst forecast. The biggest deterioration occurred with Argentina, whose projection for GDP in 2023 went from a 1% growth in December to a 2% drop in April. Colombia’s growth estimate was revised from 1.5% to 1.2%. Peru, from 2.2% to 2%. Bolivia and Uruguay, from 2.9% to 2%.

Some countries had the estimate revised upwards. The growth forecast for the Mexican economy increased from 1.1% to 1.5%. For Chile, the projection changed from a drop of 1.1% to a shrinkage of 0.3%.

According to ECLAC, the two main factors for the slowdown in the economy of Latin America and the Caribbean are high interest rates across the planet, uncertainties about the war in Ukraine and the fall in the price of raw materials, which benefited the region, major producer of primary goods last year.

With regard to interest rates, the United Nations body pointed out that the turmoil registered in March in banks in developed countries increased the uncertainties and volatility of the financial market, which will affect global economic growth and will have repercussions on the Latin American continent. “Although inflationary pressures have slowed down, it is expected that monetary policy rates will remain high during 2023 in the main developed economies,” ECLAC said in a statement.