World Bank says Brazil’s growth will “substantially” decline in 2022

New projections presented by the World Bank this Tuesday reveal that among the world’s largest emerging economies, only Russia will outperform Brazil in 2022. Moscow is experiencing its biggest isolation attack in decades because of the war in Ukraine.

“Growth in Brazil is expected to decline sharply from 4.6% in 2021 to 1.5% in 2022 and then to just 0.8% in 2023,” the World Bank says.

“Following a solid start to 2022, growth is expected to slow throughout the year as real incomes tighten due to double-digit inflation, investment growth stalls, and domestic policy uncertainty increases,” the agency said.

Compared to the forecasts made at the beginning of the year, there is a slight increase of 0.1 points for Brazil. But it is far from compensating for the slowdown. The data contrasts with the image Brazil is trying to convey abroad. At the International Labor Organization this week, Minister José Carlos Oliveira spoke of “recovery” and took a boastful tone.

Worldwide, the World Bank projects growth of just 2.9%, 1.2 percentage points below the forecast in January. European economies are seeing a sharp downward revision as inflation and the war in Ukraine force economists to revise their forecasts.

Growth in Latin America will be 2.5% per year, and only Haiti and Paraguay will have below Brazilian rates. The report does not publish figures from Venezuela due to the lack of reliable data.

The indices show that the 2022 growth projections among major economies are as follows:

IIndia 7.5%
Saudi Arabia 7%
Corn 6.1%
Indonesia 5.1%
Argentina 4.5%
China 4.3%
Pakistan 4.3%
Nigeria 3.6%
Thailand 2.9%
USA 2.6%
EU 2.4%
Turkey 2.3%
South Africa 2.1%
Japan 1.7%
Mexico 1.7%
Brazil 1.5%
Russia -8.9%

According to the World Bank, “Recently announced programs that allow extraordinary withdrawals from unemployment insurance funds, speed up social security payments and provide concessional loans will provide households with some relief, but probably at the expense of higher inflation.”

The projections for the next year will not be better. “Weak momentum and the continued effects of tighter monetary policy on investment and activity in 2023 are expected to limit growth,” it warns.

In 2024 alone, Brazilian GDP will grow by 2% again.