HOME > Business

Finance Ministry reduces GDP growth forecast to 3,5%

Led by Guido Mantega, the Ministry of Finance has reduced its official economic growth forecast for this year from 4,5% to 3,5%; this estimate is included in the draft of the 2014 Budget Guidelines Law (LDO), sent this Monday by the Executive Branch to the National Congress.

Finance Ministry reduces GDP growth forecast to 3,5% (Photo: Luciano Bergamaschi/Futura Press)

Wellton Maximo
Reporter from Agência Brasil

Brasilia – The Ministry of Finance has reduced its official forecast for economic growth this year from 4,5% to 3,5%. The estimate is included in the draft of the Budget Guidelines Law (LDO) for 2014, sent today (15) by the Executive to the National Congress.

Although the Budget Guidelines Law (LDO) project is released by the Ministry of Planning, the parameters for the economy are developed by the Economic Policy Secretariat of the Ministry of Finance. The previous estimate of 4,5% growth in the Gross Domestic Product (GDP, the sum of all goods and services produced in the country) in 2013 was included in this year's General Budget of the Union, approved earlier this month by President Dilma Rousseff.

Regarding official inflation as measured by the Broad National Consumer Price Index (IPCA), the project forecasts an accumulated variation of 5,2% in 2013 and 4,5% in 2014. However, the Finance Ministry's forecasts are more optimistic than those of the Central Bank. In its Inflation Report, released at the end of March, the monetary authority predicts that the economy will grow 3,1% in 2013 and that inflation will close the year at 5,7%, reaching 5,3% in 2014.

Editing: Nadia Franco