Brazil’s economists more upbeat on growth, expect GDP to expand more than 2% in 2023

Jonathan Lopez


SAO PAULO (ICIS)–Brazilian economists surveyed by the Banco Central do Brasil (BCB) have turned optimistic about GDP growth in 2023, expecting economic output to expand by 2.14%, compared with 2022.

Only four weeks ago, the same survey showed GDP growth expectations at 1.20%.

GDP expectations among more than 100 economists and analysts surveyed weekly have been improving for six consecutive weeks, said the BCB.

The weekly report also showed an improvement in expectations for inflation, the real’s exchange rate and interest rates.

Last week, US credit rating agency S&P upgraded Brazil’s GDP growth expectations from its prior 0.7% estimate to 1.7%.

Falling inflation has been a key factor for Brazilian sentiment to turn more positive. In May, the annual rate of inflation stood at 3.9%, a level it had not reached since the first half of 2020.

On Monday, the BCB’s weekly report showed economists still expect, however, the annual rate of inflation to average 5.12% in 2023, although that figure is much lower than the 5.80% they expected four weeks ago.

Brazil’s main interest rate benchmark, the Selic, currently stands at 13.75%, one of the reasons why consumption has slowed down in the past few months as high borrowing costs deterred consumers from big-ticket purchases.

Economists expected the Selic to close 2023 at 12.25%, according to the survey, a quarter percentage point lower than a month ago.

Finally, expectations for the Brazilian real’s (R) exchange rate against the dollar also improved in the survey published on Monday.

Four weeks ago, economists expected the dollar/real rate to stand at $1:R5.15; on Monday, the average forecast stood at $1:R5.00.

On the back of more positive sentiment, the real has been strengthening sharply since the beginning of June.

On Monday, its exchange rate stood at $1:R4.76, an appreciation of nearly 5% in the past month.

Dollar/real exchange rate
Last 30 days


Front page picture: Santos Port, near Sao Paulo; archive image
Source: Santos Port Authority


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