Brazil's economy will grow above 2% in 2024, inflation will be within the ceiling

On February 5, Brazilian President Luiz Inácio Lula da Silva said that the government forecasts that the Gross Domestic Product (GDP) of Latin America's largest economy will grow by over 2% this year.

The main driver of Brazil's economic growth is expanding domestic demand. (Source: Wikipedia)

In a report to the Brazilian Congress, Mr. Lula da Silva emphasized that Brazil's GDP growth in 2024 will be linked to economic policies related to environmental protection and strengthening public finances.

In addition, the main driver for growth is expanding domestic demand due to higher minimum wages and social income, while the interest rate cut cycle that started last year will also contribute to the development of manufacturing industries.

In the report, the Brazilian government estimated that inflation in the country in 2024 will be within the ceiling set by the Central Bank (BCB), at 3% with a margin of +/-1.5%.

According to a report by the Brazilian Institute of Geography and Statistics (IBGE), in 2023, the inflation rate in the South American country for the year was 4.62%, the lowest figure since 2020.

IBGE points out that some of the main causes of inflation in Brazil are high transportation costs, in addition to spending on health care and housing.

Meanwhile, remarkable growth in agricultural production has helped the country expand supply, contributing to curbing domestic food prices.

* Also on February 5, the Organization for Economic Cooperation and Development (OECD) released a report, maintaining its forecast for Brazil's economic growth at 1.8% this year.

The OECD's forecast is more optimistic than the International Monetary Fund's (IMF) estimate of the country's GDP growth.

Last week, the IMF forecast that Latin America's largest economy's GDP would grow by 1.7% in 2024.

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