World Bank Raises Growth Forecast for Brazil in 2023
The World Bank has raised Brazil’s growth forecast for Gross Domestic Product (GDP) in 2023 from 0.8% to 1.2%. The multilateral organization said in its Global Economic Perspectives report, published on Tuesday, that despite the improvement in some Latin American countries, economic growth in 2021 would be mainly supported by exports, in a scenario of difficulties caused by persistently high domestic inflation and rising interest rates. Despite the improvement in 2023, the World Bank reduced the growth projections for the Brazilian economy in 2024 from 2% to 1.4% compared to the previous report, published in January. For 2025, the multilateral organization estimates an expansion of 2.4%.
World Bank: Interest Rate Hikes Will Have Their Effect Next Year
Even with the improvement, the World Bank’s estimate represents a slowdown compared to 2022 when the global economy grew by 3.1%. For 2024, the report lowered the growth forecast from 2.7% to 2.4%. According to the international organization, high-interest rates will have their effect next year through a drop in commercial and residential investment. Published twice a year, the report lists estimates of the performance of economies around the planet made by the World Bank.
US and Other Large Economies Are Proving to be Resilient
For the global economy, the document raised the economic growth estimate from 1.7% to 2.1%. According to the World Bank, the United States and other large economies are proving to be resilient to the interest rate hikes decided by the main central banks.
Resilience of the Global Economy
In a scenario that it classified as “resilience of the global economy,” the World Bank raises its growth forecast for the Gross Domestic Product (GDP, the sum of the wealth produced in the country) of Brazil in 2023 from 0.8% to 1.2%. Published by the financial institution, the Global Economic Perspectives report, on Tuesday (6), notes that despite improvement, the World Bank lowered the growth projections for the Brazilian economy in 2024 from 2% to 1.4% as against the previous report, released in January. Numbering the estimates of economies worldwide made by the World Bank, the report states that despite the improvement in some Latin American countries, economic growth in 2021 will be mainly supported by exports. These improvements come amid difficulties caused by persistently high domestic inflation and rising interest rates.
Interest Rate Hikes Will Take Their Effect Next Year
The World Bank lowered its global economic growth forecast from 1.7% to 2.1%, even with the resilience of the economy. According to the international organization, high-interest rates will, however, take effect next year through a drop in commercial and residential investment. Furthermore, the Bank’s estimate represents a slowdown compared to 2022, when the economy grew by 3.1%. In the report, the growth forecast for 2024 dropped from 2.7% to 2.4%.
Summary
The World Bank’s Global Economic Perspectives report released on Tuesday raised Brazil’s growth forecast from 0.8% to 1.2% in 2023 due to the resilience of the global economy, despite Brazil’s persistently high domestic inflation and rising interest rates. Though there are improvements compared to some Latin American countries, economic growth in 2021 will be predominantly bolstered by exports. On the other hand, the report projects a reduced growth rate for the Brazilian economy in 2024 from 2% to 1.4% compared to the previous report. The World Bank predicts an estimated 2.4% expansion rate in 2025, but it lowered its global economic growth forecast from 1.7% to 2.1%. Good news, however, resides in the report’s assertion that the US and other large economies have proven resilient to the interest rate hikes decided on by the primary central banks.
Additional Piece
The Brazilian economy displayed resilience at the beginning of 2021, despite the challenging backdrop caused by world events, including COVID-19 and an uneven vaccine distribution program. However, according to the World Bank’s Global Economic Perspectives report, the development and growth rate will narrow if Brazil remains unable to reduce its present domestic-related issues, such as interest rates and inflation. Brazil’s economic expansion will be predominantly bolstered by its export sector, leading to a 1.2% growth rate in 2023, while the World Bank projects a growth rate slowdown to 1.4% in 2024.
These projections aren’t favorable to the Brazilian economy, as they indicate an economic decline caused by macroeconomic issues such as inflation rates and rising interest rates. The international finance institution states that high-interest rates, for instance, could reduce commercial and residential investment within Brazil’s economy, thereby negatively impacting growth, economic activity, and job creation in the nation.
Even with the upswing in global economic growth from 1.7% to 2.1%, the World Bank predicts that a slowdown may happen later, with a projection for the global economy to decrease to 2.4% growth. There are prospects of decreased commercial and residential investment proximal to 2024, as evident in the report, leading to the Bank’s decision to lower its forecast for 2024’s growth rate from 2.7% to 2.4%.
To ensure sustained growth, Brazil needs to reassess its macroeconomic policies as combating inflation and reducing interest rates should be a top priority. A stable economy leads to greater job creation and investment, thereby increasing Brazilians’ quality of life and safeguarding future generations. Similarly, other Latin American nations should examine Brazil’s initiatives and borrow a leaf from them to develop their economics.
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In a scenario that it classified as “resilience of the global economy”, the World Bank raised its growth forecast for the Gross Domestic Product (GDP, sum of the wealth produced in the country) of Brazil in 2023 from 0.8% to 1, 2%. appears in the Global Economic Perspectives report, published this Tuesday (6) by the financial institution.
Despite the improvement in 2023, the World Bank reduced the growth projections for the Brazilian economy in 2024 from 2% to 1.4%, compared to the previous report, published in January. For 2025, the multilateral organization estimates an expansion of 2.4%.
Published twice a year, the report lists estimates of the performance of economies around the planet made by the World Bank. According to the multilateral organization, despite the improvement in some Latin American countries, economic growth this year will be mainly supported by exports, in a scenario of difficulties caused by persistently high domestic inflation and rising interest rates.
For the global economy, the document raised the economic growth estimate from 1.7% to 2.1%. According to the World Bank, the United States and other large economies are proving to be resilient to the interest rate hikes decided by the main central banks.
Even with the improvement, the World Bank estimate represents a slowdown compared to 2022, when the global economy grew by 3.1%. For 2024, the report lowered the growth forecast from 2.7% to 2.4%. According to the international organization, the high interest rates will have their effect next year, through a drop in commercial and residential investment.
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Banco Mundial eleva para 1,2% previsão de crescimento do Brasil em 2023
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