Brazil Central Bank Improves 2023 GDP Growth Forecast To 2.0%

• Brazil's central bank joined on Thursday, June 29, a wave of recent upward revisions for the country's economic growth this year, guided by a solid first quarter boosted by the agriculture sector.
• In its quarterly inflation report, the central bank forecasts a 2.0% expansion in gross domestic product (GDP) for 2023, up from the 1.2% estimate in March.
• The figure came slightly below the 2.18% growth expected by private economists in a weekly survey conducted by the bank and remains weaker than last year's 2.9% GDP expansion.
• "The revision mainly reflects positive surprises in some industrial and service sector activities in the first quarter, in addition to improved forecasts for agriculture," said the report.
• The central bank emphasized that the outlook ahead points to an economic slowdown as the cumulative effects of domestic monetary policy and the influence of global growth deceleration take hold.
• Following last week's decision to maintain interest rates at a cycle-high of 13.75% for the seventh consecutive policy meeting, the central bank reinforced in the report that its future actions would be data-dependent, focusing on inflation dynamics and expectations.
• The minutes from the decision indicated that most policymakers see the possibility of a "parsimonious" rate cut at the next meeting in August, contingent upon consolidating a more benign inflation scenario.

(Source: Reuters)