GDP in 2023 and What Can Be Expected in 2024

BRAZIL ECONOMICS - Report 05 Mar 2024 by Affonso Pastore, Cristina Pinotti, Paula Magalhães and Diego Brandao

Last year, Brazil’s GDP expanded by 2.9%, basically the same pace as achieved in 2022 (3.0%), but with peculiar characteristics. Almost one-third of the result was due to the extraordinary performance of agriculture in the first quarter of 2023, which should not repeat this year. The stagnation observed in the second half of the year, based on the effects of the restrictive monetary policy adopted by the Central Bank, has shown signs of reversal since December according to the monthly job market indicators. In parallel, signs of a trend reversal have started to appear in prices, especially the items more strongly correlated with the economic cycle, such as underlying services. These signs can accentuate with the continued easing of the interest rate promised by the Central Bank and with the evolution of the income transfers and tax breaks to be granted by the executive and legislative branches against the backdrop of this year’s municipal elections. All the same, we expect lower growth in 2024, of around 2%.

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