The International Monetary Fund (IMF) raised its growth outlook for Brazil in 2020, however it helped to contain the negative pressure from Mexico and Chile on the estimate for Latin America.
In its revised World Economic Outlook report, released on Monday, the IMF began to see an increase in Gross Domestic Product (GDP) of 2.2% for Brazil this year, 0.2 percentage points more than in the October report. The projection for global growth is 3.3% in 2020.
Mining Sector
According to the IMF, the upward revision of the estimate for this year is due to “the improvement in sentiment after the approval of the pension reform and the reduction of supply problems in the mining sector”.
The fund's projection for this year is lower than that estimated by the market and the government. According to Monday's Focus Bulletin, which compiles market estimates for economic indicators, Brazilian GDP should grow 2.31% this year. The government, on the other hand, expects growth of 2.40%.
For 2019, there was also an improvement in the projection, of 0.3 points, to 1.2%. This estimate, however, is above the government's projection, 1.12%, and the market's projection, 1.17%. The IBGE will release the Gross Domestic Product (GDP) data for the fourth quarter and the year of 2019 on March 4.
The improved outlook for Brazil offset downward revisions to Mexico's growth in 2020 and 2021, among other reasons for continued weakness in investment.
In addition to a strong reduction for Chile after social demonstrations, Latin America's growth estimate is now 1.6% in 2020 and 2.3% in 2021, respectively cuts of 0.2 and 0.1 percentage points.
For emerging and developing markets, the IMF forecasts expansion of 4.4% in 2020 and 4.6% in 2021, compared to the 3.7% estimated for 2019. The accounts for this year and next, however, were reduced by 0.2 percentage points each compared to the October forecast.