Brazil Analysts Raise 2017 Growth Forecast to Highest in a Year

The Slow Unraveling of Brazil, Explained in Two Minutes

Brazil economists haven’t been so optimistic about 2017’s growth outlook since September of last year, before the nation was rattled by a political crisis that culminated in the ouster of its president.

Latin America’s largest economy will grow 1.36 percent next year, according to a weekly central bank survey of analysts. That’s up from 1.3 percent the prior week and 1 percent in July. Estimates had fallen to as low as 0.2 percent in April, in the weeks preceding Dilma Rousseff’s suspension from office.

While the economic reforms proposed by new President Michel Temer have fueled hopes for an economic rebound next year, Brazil’s economy is still faltering. The central bank’s economic activity index declined 0.09 percent in July, disappointing economists who expected a 0.2 percent expansion, according to a Bloomberg survey.

Brazil’s central bank board has signaled it is monitoring economic data for signs it can start cutting interest rates to help revive economic growth. The bank’s board has indicated it won’t cut borrowing costs to stimulate economic growth until it has greater confidence it will reach the inflation target. The institution’s president, Ilan Goldfajn, said in a recent interview that investor perception of risk in the Latin American country will be a key factor in his decision to ease monetary policy.

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