Brazilian government cuts GDP growth forecast to 1.6pc

Published: July 21, 2018 12:57:12 | Updated: July 24, 2018 15:00:52

The Brazilian government has cut its forecast for gross domestic product (GDP) growth this year to 1.6 per cent from 2.5 per cent and raised the estimate for the inflation rate in 2018.

The government raised its forecasts for net revenue by 3.194 billion reais ($845.6 million) and for primary expenses by 7.546 billion reais, according to the latest Income and Debt Report.

The estimate for the inflation index rose from 3.4 to 4.2 per cent in the edition of the report released by Brazil's Ministry of Planning, Budget and Management on Friday.

The rise in inflation is also due to the truckers' strike and the US dollar's rise against the Brazilian real in recent months, according to the authorities.

The exchange rate between the US dollar and the Brazilian real hit 3.77 currently, and the US currency has been accumulating an appreciation of 13.89 per cent since the beginning of the year.

The estimates for the 2019 GDP growth fell from 3.3 to 2.5 per cent, reports Xinhua.

According to Fabio Kanczuk, Brazil's secretary of economic policy, despite the reduction, the economy is showing some recovery, as shown by some indicators in June.

He said that with fiscal efforts and a reduction in the uncertainty, next year's figures could be better.

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