IMF Lowers Brazil's GDP Growth Forecast for 2024 Due to Severe Flooding in the South

In Short:

The International Monetary Fund (IMF) has adjusted its forecast for Brazil's Gross Domestic Product (GDP) growth in 2024, slightly lowering it from 2.2% to 2.1%. This revision is attributed to the economic impacts of the devastating floods in Rio Grande do Sul. Despite this decrease, the IMF projects a stronger growth in 2025, with the economy benefiting from post-flood recovery efforts.

Even with the downward revision, Brazil's growth in 2024 is still expected to surpass the average forecast for Latin America and the Caribbean, which stands at 1.9%, although it will fall short of the 4.3% growth anticipated for emerging markets and developing economies. The IMF report highlights that the reduced growth reflects the immediate effects of the floods, but a stronger recovery is expected in the medium term.

For 2025, the IMF forecasts that Brazil's economy will grow at a rate of 2.4%, a positive revision from the previous projection of 2.1%. This increase is attributed to reconstruction efforts and supportive structural factors, such as accelerated hydrocarbon production. The report suggests that these factors will contribute to more robust and sustainable growth in the future.