MercoPress. South Atlantic News Agency

World Bank lowers Brazil tepid growth estimates both in 2018 and 2019

Brazil's performance last year suffered the impact of the truckers strike on economic activity, plus the “political uncertainties” of the election year.

The World Bank lowered its growth estimates for Brazil both in 2018 and this year. Last June the multilateral organization bi-annual report indicated that Latin America's largest economy would advance 2.4%, but it has now reduced that to 1.2%, one of the greatest falls for any country in the report.

This year, Brazil's GDP expansion has been lowered from 2.5% to 2.2%, but keeps its estimate of 2.4% for 2020.

All these numbers and estimates can be read in the recently released Global Economic Prospects: Darkening Skies.

According to the World Bank report, Brazil's performance last year was darkened to a great extent because of the truckers strike impact on economic activity, plus the “political uncertainties” of the election year.

Brazil can expect a 2.2% expansion in 2019 on the presumption that fiscal reforms are rapidly implemented and that consumption and investment recovery will outweigh cuts to government spending, indicates the report with no direct mention to the structural changes expected in the pensions scheme.

The World Bank report also lowers slightly its global growth estimates, by shaving 0.1 percentage point both for 2018 and 2019.

Last June the WB was expecting a 3.1% expansion last year, but it lowered it to 3%, and likewise for 2019, from 3% to 2.9%.

For next year, 2020, the global growth estimate was also reduced from 2.9% to 2.8%. This because of the ongoing financial conditions worldwide, the increase of interest rates in the US, global trade uncertainties arising from the current commercial dispute between Washington and Beijing, as well as a loss of impetus from the manufacturing sector.

According to the WB darkening skies report the slowing of global economic expansion will be felt with greater force by the emerging markets and developing economies.