
Itaú Asset doubles its estimate for GDP growth in 2022, but sees a retraction in 2023
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- May 24, 2022
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Itaú Asset doubled its growth forecast for the Brazilian economy this year and also raised its estimates for inflation and interest rates at the end of 2022, with a firmer monetary tightening expected to impact activity in the second half of the year.
GDP is expected to increase by 1.6% in 2022, compared to 0.8% of the previous forecast, according to economists at the asset manager in a report dated this Monday (23). The figure for 2023, however, was reduced from a high of 0.2% to a contraction of 0.5%.
“The current year continues to show growth beyond what was expected for the first half of the year, however, we should see a deceleration of activity afterwards, with the impact of monetary restriction and slow convergence of inflation to the target”, said the institution.
Itaú Asset’s calculation for the 2022 IPCA went from 8.1% to 9.0%, while that of 2023 is now seen at 5.3%, up from the 4.6% rate in the previous scenario.
“Going forward, we should see the beginning of a slowdown in inflation as a result of the monetary contraction. However, the still strong domestic demand, exchange rate volatility and dynamics of prices for food print uncertainties about the speed of the deceleration in the advance of prices”, said the economists.
As a result of the above points, Itaú Asset increased the estimate for the Selic at the end of 2022 from 13.25% to 13.75%. For the end of 2023, the rate was maintained at 9.25%. The basic interest rate is 12.75% per year, and the next Copom meeting is scheduled for June 14th and 15th.
Source: Reuters