Brazil's Economy to Grow 0.9% in Q2 Supported by Household Spending - Reuters Poll
Brazil's economy is expected to continue its solid growth trajectory in the second quarter of 2024, driven by strong household expenditure, according to a Reuters poll. However, the country's growth may be hampered by higher imports outweighing less-dynamic exports due to recent depreciation in the foreign exchange rate.
Analysts predict a 0.9% expansion in GDP for the second quarter compared to the previous quarter, with annual growth estimated at 2.7%. The growth is likely fueled by resilient private consumption, supported by robust labor markets and rising real wages.
While public spending, including social benefit payments and aid related to floods, contributed positively to growth, higher imports are expected to have a negative impact. In the first quarter, imports surged by 7.8% while exports only grew by 1.3%.
Overall, Brazil's economic growth is on track to outperform other countries in the region, with J.P. Morgan economists forecasting continued strength in the third quarter. However, there may be some deceleration ahead as both monetary and fiscal policies are expected to become more restrictive.
President Luiz Inacio Lula da Silva's administration has signaled a willingness to accept potential rate hikes and maintain fiscal restraint, which could impact the country's economic growth in the future.
In conclusion, Brazil's economy is showing resilience and strong growth potential, but the impact of policy changes on growth going forward remains uncertain. Investors and individuals should monitor developments closely and adjust their financial strategies accordingly.
