Brazil’s central bank slashes growth forecast for 2019
HAVANA TIMES – Brazil’s central bank on Thursday slashed its economic growth forecast for this year to 0.8 per cent, down from 2 per cent predicted in March, citing the economy’s contraction in the first quarter, reported dpa news.
There are no clear signs of a recovery in the second quarter, while falling business and consumer confidence will also have a negative impact, the central bank said in presenting its quarterly inflation report.
Inflation is moving in a more positive direction. The central bank expects consumer prices to rise 3.6 per cent year-over-year by the end of 2019, down from a forecast of 3.9 per cent in March.
Official data showed that Brazil’s economy shrank by 0.2 per cent in the first three months of this year, sparking fears of a new downturn. It marked the first quarterly contraction since the 2015-2016 recession, when the economy shrank by about 7 per cent.
The slowdown has defied earlier growth forecasts of about 3 per cent, which were made when right-winger and economic liberal Jair Bolsonaro was sworn in as president on January 1.
I have no particular respect for Bolsonaro, but he is reaping the consequences of the policies and actions of Lula and Dilma, under whom expenditures far exceeded revenues, creating unsustainable levels of debt. One wonders what the effect will be when the corruption of Petrobras and Odebrecht is fully exposed.