By Marcela Ayres

BRASILIA, Reuters – Brazil’s Economy Ministry has maintained its outlook for economic growth at 1.5% and 2.5% respectively in 2022, according to two officials. This was due to the strong labor market and increasing private investment.

On Thursday, the ministry will revise its economic forecasts. Inflation figures should be improved from March’s outlook. The IPCA consumer price index stood at 6.55% in March.

This data will be used for the Friday bi-monthly income/expenditure report calculations.

Economists are forecasting a higher GDP for the year, which brings the number closer to the forecast by government.

An increase in cash transfers to the poor has helped spur demand, according to analysts. Additionally, there are signs of strength in the labor market and Omicron coronavirus has not impacted social mobility like some had feared.

They say that expectations have fallen for 2023, and they expect that central banks will tighten their monetary policies to control inflation. This is expected to impact activity in the second half.

After raising interest rates by 12.75% in March from an unprecedented low of 2%, the central bank already indicated a possible hike for June.

Goldman Sachs (NYSE 🙂 and Credit Suisse see Brazil’s GDP increasing 1.25% this year and 1.4% in 2019, respectively, compared to previous projections of 0.6% and 0.2%. Goldman Sachs has lowered its 2023 forecast from 1.2% to 0.9%, and Credit Suisse has lowered its outlook from 2.1% to 0.9%.

Bank of America (NYSE 🙂 predicted Tuesday that Brazil would grow 1.5% by 2022, up from 0.5% previously. However, the expansion rate is 0.9% now, compared to 1.8% in previous years.