Market analysts have cut their 2014 growth forecast for Brazil after Latin America’s largest economy entered recession, the country’s Central Bank said Monday.
Analysts canvassed by the Bank revised down their annual forecast from 0.7 percent to 0.52 percent after the national statistics institute had Friday shown second-quarter GDP falling for a second straight quarter.
The data included a revision into negative territory from an initial first quarter rise of 0.2 percent.
A month ago, the analysts had forecast a 0.86 rise for 2014. For 2015, the analysts see growth coming in at just 1.10 percent, down from 1.5 percent a month ago.
Just a month away from presidential elections which latest polls see incumbent Dilma Rousseff as losing to environmentalist Marina Silva in a likely run-off, Brazil is also battling inflationary pressures.
The Bank predicted an annualized rate through to August 29, the date of its analysts poll, of 6.24 percent, just beneath the July official ceiling figure of 6.5 percent.
Brazil, the world’s seventh-largest economy, has endured four years of anaemic growth amid the global economic downturn since it posted a 7.5 percent GDP rise in 2010.
The government insists the global situation is the main factor behind the weak showings since, but the opposition pin much of the blame on domestic economic inefficiency.
Some analysts nonetheless accept the government assertion that a swathe of public holidays during the June-July World Cup acted as a brake on economic activity — Rousseff herself dubbed the data a blip.
The Bank in late June reduced the official growth target for this year down to 1.6 percent from 2.0 percent while the government cut their projection to 1.8 percent from 2.5 percent.