Brazil's Economic Outlook Is One of Instability and Mediocre Growth

Reheating of services encourages economists, but inflation, interest rates and elections weigh against it

São Paulo

The rapid deterioration of the political and institutional environment, added to persistent inflation, a historic drought that compromises energy supply and agribusiness, high interest rates and fiscal disarray have already contaminated the economic scenario in Brazil and deflated the prospect that the market will gain momentum after a year and a half of pandemic.

Projections for 2022 began to reflect this “back to the same” — mediocre growth. The Focus bulletin, which gathers market estimates, revised its forecast for growth next year from 2.5% in January to 2.1%. The International Monetary Fund lowered its expectations to 1.9%. Entrepreneurs and merchants also review plans.

“The trend is that 2022 will bring a period of great caution for foreign investors in relation to Brazil and that Brazilians will also withdraw,” says João Leal, an analyst at investment manager Rio Bravo.

Translated by Kiratiana Freelon

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