Brazil
Economic performance in Brazil was resilient last year due largely in part to a record harvest. In 2024, real GDP growth slows considerably to 1.4% from 2.9% with expectations of a lower harvest and the effects of high interest rates. Real interest rates in Brazil are still among the highest of any major economy but remain on a downward trend, supporting business and consumer confidence.
Inflation continues to decline with a marginal revision from Q4 2023 estimates to 4.0% for 2024. Further deceleration is expected but at a slower pace because gradually increasing consumer demand will create consistent price pressures.
Economic growth remains highly vulnerable to numerous downside scenarios. A significant slowdown of China’s economy could hurt Brazilian export revenues due to lower demand for agricultural and energy commodities.
The agricultural sector also faces major disruptions from El Niño, which causes massive rains and unusually long dry periods. Unstable weather conditions could lead to significantly reduced output, lowering growth and potentially fuelling inflation.
Brazil: Q1 2024 Forecasts
Source: Euromonitor International Macro Model
Note: Annual rates in percentages. Revisions in percentage points.
