Brazil’s central bank raises 2022 GDP growth forecast

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BRASILIA — Brazil’s central bank lifted its growth outlook for 2022 to 1.7% from 1% as Latin America’s largest economy performed better than expected in the first quarter, according to an official presentation on Thursday.

The figure is higher than the 1.5% growth expected by the country’s economy ministry.

Diogo Guillen, the central bank’s economic policy director, said economic activity in the first quarter came in stronger than expected on the back of higher services consumption, use of “excess savings” by Brazilians and transitory fiscal stimulus.

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Guillen, speaking in a news conference, stressed that the central bank had raised its GDP projection because of household consumption and exports, which have benefited from higher commodity prices.

But he added that an economic slowdown is expected in the second half of this year.

According to the central bank, Brazil’s current account surplus is now seen at $4 billion this year, compared to a previous forecast of $5 billion. Policymakers also revised their forecast for outstanding loan growth this year to 11.9% from 8.9%. (Reporting by Marcela Ayres; Editing by Mark Porter and Paul Simao)

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