A report from Brazil’s economy ministry predicts a GDP growth range for the country in 2023 between 1.4% to 2.9%, putting the department at odds with analysts outside the government who estimate a much lower level of growth.
Private economists have estimated growth of just 0.7% next year, according to a survey by the central bank. The ministry disputes such a pessimistic outlook however, with a report from the Economic Policy Secretariat pointing to the prevalence of forecasting errors over the past three years and arguing that the economy will benefit from higher structural growth.
The official government estimate of a 2.5% increase in GDP, a figure which has already been questioned as unrealistic, would be at the higher end of the ministry’s predicted range. With Luiz Inácio Lula da Silva set to return to power in Brazil for a third time in the new year, much will depend on the policy direction taken under his leadership.
The report from the secretariat asserts that traditional models for projections are based on past observations and, therefore, cannot used reliably to make projections that incorporate more recent structural changes, such as new legal frameworks which have led to increased private investment.
Almost 82 billion reais ($15.9 billion) are expected in investments in partnerships and concessions in 2023 according to the report, an increase of 10% on the forecast for the current year.
The ministry’s projections incorporate the economic slowdown experienced by both emerging and developed economies in 2022, although it warned the possibility of recession would “significantly change” its position.