The World Bank has reduced Brazil’s growth forecasts for 2018 and this year. In June, the multilateral institution estimated that the country would advance 2.4% last year, but now forecasts a 1.2% increase, one of the largest projection reductions for countries.
For 2019, BIRD reduced Brazil’s gross domestic product (GDP) forecast from 2.5% to 2.2% and maintained the assessment that the national economy should grow by 2.4% in 2020. These considerations were released in the Global Economic Prospects report, whose subtitle is “Darkening Heavens”.
According to the World Bank, the country’s growth was dull in 2018, largely reflecting the effects of the truckers’ strike and “political uncertainties.”
“Expansion of 2.2% (in 2019) is forecast for Brazil, assuming that fiscal reforms are implemented quickly and that the recovery of consumption and investment will overcome cuts in public spending,” the document said, without making direct mention of the structural changes in the Pension System.
BIRD also slightly reduced its global growth forecast by 0.1 percentage point for each year between 2018 and 2020.
In June, the bank forecast a 3.1% expansion for 2018, but fell to 3.0% and reduced the estimate from 3.0% to 2.9% for 2019.
For 2020, the projection fell from 2.9% to 2.8%. The review is related to the tightening of global financial conditions, which stems largely from rising interest rates in the US, from uncertainties in international trade, especially from disputes between Washington and Beijing, and from the loss of manufacturing strength.
The slowdown in international expansion should be higher in the group of countries classified by the World Bank as Emerging Markets and Developing Economies.