By Lise Alves, Contributing Reporter
SÃO PAULO, BRAZIL – Forecasts on the growth of Brazil’s economy decreased further this week, with the International Monetary Fund (IMF) reducing its growth forecast from 1.8 percent (in April) to 1.3 percent on Thursday. This is the fifth time this year the IMF has reduced its forecast of Brazil’s economic growth.
For the international organization, restrictive financial conditions and decreasing business and consumer confidence are delaying investments and reducing consumer growth. In April of 2013 the IMF had forecast a growth of four percent for Brazil this year.
Earlier this week Brazil’s government officially admitted that economic growth for 2014 would be lower than previously estimated. In its Revenues and Expenditures Assessment Report, released Tuesday, the government revised its 2014 GDP growth from 2.5 percent to 1.8 percent.
The downward revision was made after negative indexes were registered in the past few months, especially in the industry and retail sales sectors. In 2013 the country’s economy grew by 2.5 percent.
The government’s new economic growth forecast, however, is still significantly higher than that of the market. A recent survey conducted by Brazil’s Central Bank with 100 financial institutions shows that the median forecast by the market is of a growth of 0.97 percent.
If the market’s forecast is correct this will be the lowest annual economic growth for Brazil since 2009, when the country registered a retraction of 0.3 percent. For 2015 the IMF forecasts a two percent economic growth for the country while Brazil’s government estimates a 1.5 percent growth for next year.
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