With a projected growth of 3.1% in Gross Domestic Product (GDP), Brazil will jump two positions and become the ninth largest economy in the world in 2023, the International Monetary Fund (IMF) announced this week. According to the institution, the country is expected to end the year with a nominal GDP of US$ 2.13 trillion, surpassing Canada, which has an estimated GDP of US$ 2.12 trillion.
No last year, Brazil was in 11th place. According to the IMF, by 2026, Brazil could rise one position and become the eighth largest economy on the planet, with an estimated GDP of US$ 2.476 trillion.
The estimates were released based on the World Economic Outlook report, launched in October. At that time, the IMF estimated a 3.1% growth for the Brazilian GDP this year, compared to an estimate of 2.1% in the previous report.
According to the IMF, the United States, China, and Germany continued to be the largest economies in the world this year. The agency projects that the global economy will slow down this year, growing by 3%, compared to 3.5% in 2022. For 2024, the IMF estimates global expansion of 2.9%.
For Brazil, the IMF projects growth of 1.5% next year. This projection is lower than that of the Organization for Economic Cooperation and Development (OECD), which forecasts an expansion of 1.8% for the Brazilian economy in 2024.
Central Bank Estimates Inflation Will Close the Year at 4.6%
The inflation in Brazil, measured by the Broad Consumer Price Index (IPCA), is expected to close the year at 4.6%, and the chance that the index will exceed the target has dropped from 67% to 17%. This information is included in the inflation report for the third quarter, released by the Central Bank (BC).
Defined by the National Monetary Council (CMN), the inflation target for this year is 3.25%, with a fluctuation range between 1.75% and 4.75%.
The report also mentions the decision of the Monetary Policy Committee (Copom) to reduce the basic interest rate by 0.50 percentage points, to 11.75% per year (a.a.), and states that the decision is consistent with the strategy of converging inflation towards the target over the relevant horizon, which includes the years 2024 and 2025.
The bank also revised its GDP forecast, increasing it from 2.9% to 3% for this year. For 2024, the forecast changed from 1.8% to 1.7%.
“The prospective scenario includes an increase in the growth pace over the next year, with moderation in household consumption, a resumption of investments, and maintenance of a favorable balance in external accounts,” the document states.
Check out the ranking of the ten largest economies in the world in 2023, according to the IMF projection:
1. United States – US$ 26.95 trillion
2. China – US$ 17.7 trillion
3. Germany – US$ 4.43 trillion
4. Japan – US$ 4.23 trillion
5. India – US$ 3.73 trillion
6. United Kingdom – US$ 3.33 trillion
7. France – US$ 3.05 trillion
8. Italy – US$ 2.19 trillion
9. Brazil – US$ 2.13 trillion
10. Canada – US$ 2.12 trillion
Source: International Monetary Fund and Agência Brasil