Brazil’s Economy Expected to Grow at Least 3% This Year, Says Finance Minister

Brazil’s Economic Outlook and Inflation Concerns

BRASILIA – Brazil’s Finance Minister Fernando Haddad announced on Wednesday that the government is likely to revise its annual economic growth forecast to above 3%, an increase from the previous estimate of 2.5%.

"I believe that a floor of 3% is already virtually secured," he stated during a press conference.

Haddad raised concerns about inflation, particularly due to adverse climate conditions that have led to severe droughts and wildfires impacting various regions of the country’s economy.

"The impact of the climate on food prices and potentially on energy prices makes us a bit worried about this," he commented.

Nevertheless, the minister pointed out that increasing interest rates will not effectively address the consumer price pressures stemming from these environmental factors.

The central bank is scheduled to meet on September 17-18, with economists anticipating a 25-basis-point hike in the benchmark interest rate, which has remained at 10.5% in the last two policy meetings.

"The central bank has a very solid technical team to make the best decision," Haddad remarked.