Brazil Keeps 2020 GDP Forecast at -4.7% (Reuters)
Last Modified: 10:11 AM, Tue Sep 15, 2020
15 September 2020

Word Count: 77

Brazil's Economy Ministry today kept its forecast for a record 4.7% fall in GDP this year, predicting that the recovery already underway will accelerate as the year goes on. It expects growth in the third quarter to be led by industry, agriculture and trade, which will help drive an overall GDP expansion of 7.3% from the preceding three-month period. The dominant services sector, which accounts for around 70% of all economic activity, will start to show a "more vigorous" performance in the fourth quarter, it said. It also maintained its 2021 GDP growth forecast of 3.2%. It raised this year's inflation forecast to 1.83% from 1.6% and lowered next year's to 2.94% from 3.24%. Separately, President Jair Bolsonaro said he will never cut welfare payments for retirees or the disabled to fund social assistance programs, adding that the government will keep the 'Bolsa Familia' social welfare program in place.

BRASILIA, Sept 15 (Reuters) - Brazil's Economy Ministry on Tuesday kept its forecast for a record 4.7% fall in gross domestic product this year, predicting that the recovery already underway from the depths of the pandemic-fueled crisis will accelerate as the year goes on.

The ministry said it expects growth in the third quarter to be led by industry, agriculture and trade, which will help drive an overall GDP expansion of 7.3% from the preceding three-month period.

The dominant services sector, which accounts for around 70% of all economic activity and has yet to recover pre-pandemic levels of growth, will start to show a "more vigorous" performance in the fourth quarter, the ministry said.

The ministry also maintained its 2021 GDP growth forecast of 3.2%. While the outlook is still subject to a high degree of uncertainty due to the COVID-19 crisis, economic policy secretary Adolfo Sachsida said next year's forecasts was still on the conservative side.

The ministry also raised this year's inflation forecast to 1.83% from 1.6% and lowered next year's to 2.94% from 3.24%. Both would still be well below the central bank's official goals of 4.0% and 3.75%, respectively. 

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Dateline: BRASILIA, Sept 15 (Reuters)
Creditline: Reuters
Slugline: BRAZIL-ECONOMY/GOVT-OUTLOOK (URGENT)