BRAZIL: Central Bank Projection For GDP Growth In 2017 Rises To 1%

Mainly reflecting the positive performance of the Gross Domestic Product (GDP) in the third quarter, with growth of 0.3% compared to the second quarter, the Brazilian Central Bank (BC) increased growth expectations of economic activity this year from 0.7% to 1%, according to the Quarterly Inflation Report (RTI). For 2018, the Central Bank forecasts a 2.6% growth, compared to the 2.2% forecast in the previous report, released in September.

According to figures released by the Central Bank, the Brazilian GDP growth will be driven by the advance of agriculture and livestock, which is expected to grow 12.8%, compared to an earlier forecast of +12.1%. The increase in household consumption should also contribute positively to the advance. In this segment, the expectation rose from 0.4% to 1.2% this year.

The services sector should also close on the positive side, with a 0.3% advance from -0.8% in the previous report. The performance of the industrial activity in 2017 went from -1.4% to -0.3%, while in construction the projection went from -6.6% to -5.2%.

Regarding the expectation of GDP growth in 2018, the Central Bank notes that, on the supply side, agricultural activities should retreat. Projections went from +1.5% in the previous estimate to -0.4%. Meanwhile, the industry and services should record advances of 2.9% and 2.4%, respectively.

The material has been provided by InstaForex Company – www.instaforex.com