According to The Latin American Tribune, the International Monetary Fund (IMF) has again reduced its 2014 forecast for economic growth in Brazil from 1.3% to 0.3%, but the IMF said on Tuesday that it expects Latin America’s largest economy to grow 1.4% in 2015.
In April, the IMF projected a 1.8% expansion in Brazil, lowering the estimate to 1.3% in July.
The IMF said in its biannual World Economic Outlook that the downward adjustments reflect a slump in production during the first half of 2014 combined with a low level of business confidence and constrained financial conditions amid rising interest rates.
COMMENT: All these factors have “restricted investment” and weakened job creation, squeezing consumption, the IMF said.
The Fund expects “a modest recovery of (economic) activity in 2015,” with growth of up to 1.4% as the political uncertainties surrounding the presidential election dissipate.
President Dilma Rousseff is to face Sen. Aecio Neves in an October 26 presidential runoff.