GDP: result raises positive bias for 2023, says Fazenda – 06/01/2023 – Market

The Ministry of Finance believes that the GDP result for the first quarter released this Thursday (1st) “increases the positive bias for the SPE (Secretariat for Economic Policy) growth projection in 2023, currently at 1.9%”.

The Brazilian economy grew 1.9% in the first quarter of the year, thanks mainly to the performance of the agricultural sector, which increased 21.6%. The average calculated by Bloomberg with financial market agents was 1.3%.

Despite the positive result, the economic team sees warnings for the second half. “For the second quarter, at the margin, a deceleration in the growth of Agriculture and Livestock should be observed, since the increase in grain production has a much more pronounced impact in the first quarter, due to the harvest of soybeans and corn 1st crop”, he evaluated.

In industry, which had a drop of 0.1% in the first quarter, “leading indicators are not signaling recovery in the next quarter”.

In the service sector, which rose by 0.6%, “the outlook remains favorable for the next quarter”. As reasons, the Treasury listed the creation of new jobs and the increase in real disposable income “which should be verified both by the new increase in the minimum wage in May and by the expected slowdown in inflation, especially in food and gasoline “.

The ministry led by Fernando Haddad (PT) sees growth in the year with optimism

“Positive vectors for growth should also come from the Desenrola program, Minha Casa Minha Vida and the stimulus to technological densification, derived from the Ecological Transformation Plan and credit policies for innovation and digitization, recently announced”, he pointed out.

Another important factor highlighted by the portfolio is the beginning of the fall in interest rates, expected for the beginning of the second half.

“The beginning of monetary easing and fiscal and tax reforms, added to the measures to reduce bureaucracy and streamline issuances in the capital market tend to reduce uncertainties, providing return on investment”, pointed out the note.

Despite this, concluded the Treasury, “the expected slowdown for the global economy and the monetary conditions that should remain restrictive, however, still prevail in the expected activity scenario for 2023”.