Wed. Apr 24th, 2019

Itaú bank down to 1.3% Brazil's growth forecast for 2019

Itaú bank down to 1.3% Brazil's growth forecast for 2019

Itaú-Unibanco, the largest private financial entity in Brazil, on Friday downgraded the Brazilian economy's growth forecast from 2% to 1.3% by 2019, after observing a weakening in activity and a smaller drop in the growth rate. expected from unemployment.

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The bank's economic team said that readjustment responds to "weaker current data", to the "perception of a cooling" more acute economic indicators and to a "slower decline" of unemployment rates.

Unemployment in Brazil stood at 12.4% last February, representing 13.1 million people without work, according to data from the Brazilian Institute of Geography and Statistics (IBGE).

Itaú also revised downwards the expectation of growth of the largest economy in South America for the first quarter of this year from 0.3% to -0.1%, compared to the previous three months, although it pointed to a rise of 0.6 % in the annual comparison.

"Economic activity weaker than expected marked the beginning of 2019," Itaú said in a report released Friday.

The entity also reduced the forecast for the expansion of the Brazilian Gross Domestic Product (GDP) by 2020, from 2.7% to 2.5%.

On the other hand, the bank maintained its projection in the exchange market by the end of 2019, when it forecast a dollar sold at 3.80 reais.

Brazil is still recovering from the deep recession experienced between 2015 and 2016, a period in which GDP fell 7 percentage points, and from which it only began to recover in 2017 and 2018, with slight advances of 1.1% for each year.

Analysts consulted by the Central Bank of Brazil forecast a growth of 1.97% for this 2019, a forecast more pessimistic than the 2.2% projected by the Government.

The president of Brazil, Jair Bolsonaro, in power since January 1, intends to definitively boost the growth of Brazil and reduce the bulging and chronic fiscal deficit through a plan based on deep reforms, including the pension system , and a broad plan of privatizations and concessions.


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