First-quarter growth raises positive bias for the economy this year, says Ministry of Finance

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Currently, the portfolio’s projection is for an expansion of 1.9% in GDP in 2023, and 2.3% in 2024. The government assesses that the beginning of interest rate cuts by the Central Bank and fiscal and tax reforms tend to reduce uncertainties and stimulate investments. The Secretariat for Economic Policy (SPE) of the Ministry of Finance assessed this Thursday (1st) that the 1.9% increase in the Gross Domestic Product (GDP) in the first quarter of this year “increases the positive bias for the growth projection of the SPE in 2023″. Currently, the agency’s projection is for an expansion of 1.9% in GDP in 2023, and 2.3% in 2024. According to the secretariat, after the disclosure of the GDP result in early 2023, the so-called ” carry over” (statistical carry over) for growth throughout this year is 2.4%. That is, if there is no drop in GDP in the coming quarters, the trend is for growth to remain above this value at the end of 2023. of grain production has a much more pronounced impact in the first quarter, due to the harvest of soybeans and corn 1st crop”, says the Ministry of Finance. The government adds that, for Industry, in particular manufacturing, leading indicators are not signaling recovery in the next quarter. “In this sense, the decline in the flow of heavy trucks, the fall in the production of cars and buses and the trajectory of the industrial and business confidence indices stand out. The interest conditions and spreads in the bank and non-bank credit market banking also contribute to this perspective”, he added. For the service sector, however, the SPE says that the prospects remain favorable for the next quarter, with emphasis on: generation of new formal job vacancies; real mass expansion in April; increase in real disposable income, which should be verified both by the new increase in the minimum wage in May, and by the expected deceleration in inflation, especially in food and gasoline. “It is worth noting, moreover, that consumer confidence continues to remain high, with emphasis on the component of expectations. The reduction of tax rates for new cars should also contribute to the dynamics of this sector from June”, evaluated the Ministry of Finance. The Secretariat for Economic Policy also says that, throughout this year, “positive vectors” for growth should come from the Desenrola program (debt renegotiation, foreseen by the government), Minha Casa Minha Vida and the stimulus to technological densification, derived from the Ecological Transformation Plan and recently announced credit policies for innovation and digitization. “The beginning of monetary easing [corte de juros pelo BC] and the fiscal and tax reforms, added to the measures to reduce bureaucracy and streamline issuances in the capital market tend to reduce uncertainties, providing a return on investment”, concluded the SPE.

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