SAO PAULO, Aug 28 (Reuters) – Bank of America has
revised upward its estimates for Brazil’s economic growth this
year and next, a report released on Monday showed, citing strong
carry from higher-than-expected growth in the first quarter and
falling interest rates.
The U.S.-based bank now forecasts Latin America’s largest
economy to grow 3.0% this year, up from the 2.3% expected
previously, while its projection for 2024 gross domestic product
(GDP) expansion was upgraded to 2.2% from 1.8%.
That places Bank of America well above the median estimate
of private sector economists polled by the central bank, which
points to growth of 2.31% in 2023 and 1.33% in 2024, according
to a survey released earlier in the day.
This year’s growth revision, BofA economists David Beker and
Natacha Perez said, was driven by stronger net exports and less
negative investment expectations, after first quarter GDP and
recent activity data surprised to the upside.
“Although we have barely changed our view on private
consumption, the strength of the labor market continued to
surprise us to the positive side,” they noted.
In 2024, the economists added, lower interest rates, higher
investments and lower-than-expected unemployment should favor
growth in the South American country.
Brazil’s central bank earlier this month kicked off a
monetary policy easing cycle with a larger-than-expected
50-basis-point interest rate cut to 13.25%, following nearly a
year of rate stability aimed at curbing inflation.
(Reporting by Gabriel Araujo; Editing by Kirsten Donovan)
