Brazil's Gross Domestic Product (GDP) forecast for the year 2021 has been raised from 3.2 to 3.5%, the Ministry of Economy reported Monday, while the inflation prediction also went up from 5.06 to 5.15%.
The new adjustment was due to improvements in the outlook for economic activity during the first quarter, the Government expects a reactivation of the services sector due for the second semester as the anticovid vaccination campaign progresses. According to preliminary data, during the first quarter, services expanded 2.8 % compared to the previous quarter. In year-on-year terms, the sector registered a contraction of 0.8 per cent.
In addition, the Government forecasts that the manufacturing industry will decrease by 0.6 per cent between January and March, while the extractive industry will expand by 0.8 compared to the first quarter of 2020.
Brazil's financial market rose from 3.21 to 3.45 per cent the forecast of GDP growth this year and from 2.33 to 2.38 per cent for the next, according to the Central Bank. The new figures represent an improvement, compared to the Focus survey carried out among the main financial institutions four weeks ago when expectations were at 3.04%.
The inflation projections for 2021 tightly fit with the 3.75% official goal, minus/plus 1.5 percentage points. For 2022, the projected inflation of 3.61 went up to 3.64%.
Despite the coronavirus pandemic still hitting hard, Brazil's National Industry Confederation has foreseen the country would “recover in 2021 the losses suffered in 2020.”