Brazil halved its 2017 economic growth forecast today, to 0.5 per cent from 1.0 per cent, indicating weaker confidence in a quick exit from the country's worst recession in history.
The government had already scaled back its 2017 forecast last November from 1.6 per cent. However, the finance ministry still remains bullish that Brazil's economy will rebound, predicting 2.5 per cent growth in 2018.
The less optimistic outlook for this year brings Brazil's government into line with market expectations, which are for 0.48 per cent growth in gross domestic product -- the broad measure of the economy's output -- and 2.5 per cent in 2018.
Finance ministry official Fabio Kanczuk said Brazil's fight back from more than two straight years of recession will bear fruit in the fourth quarter of this year when GDP growth will be 2.7 per cent higher than during the same period last year.
"This 2.7 per cent is more important" as a signal that the economy is "growing robustly," he said.
Good news was also expected by the government on the inflation front, where the rate was until recently stubbornly high.
According to the finance ministry, prices will increase 4.3 per cent over 2017, less than the previous estimate of 4.7 per cent and below the target of 4.5 per cent.
Brazil has been suffering since 2014 when GDP grew just 0.5 per cent before plunging into negative territory -- a 3.8 per cent contraction in 2015 and 3.6 per cent last year.
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