Brazil reduces its growth target from 2.5% to 1.6% by 2018 | Economy

The Brazil Government reduced economic growth forecasts from 2.5% to 1.6% this year, according to the Bimonthly Report on Revenue and Expenditure Assessment, published Friday by the Ministry of Planning.

The slow economic recovery of the South American giant was one of the factors that led the economic team to reduce by 0.9 point the forecast of the GDP result in 2018.

L & P Estimate released by the Ministry of Planning coincides with the end of June, the Central Bank of Brazil had announced that the projected GDP growth would be reduced from 2.6% to 1.6 % this year.

This is the second consecutive revision that the Brazilian government is making on this subject.

The initial forecast of the economic team indicated that this year the advance of the Brazilian economy would be 2.97%.

Although this second revision represents a significant reduction in GDP growth forecasts in 2018 (1.37 percentage points), it is more optimistic than that estimated by the financial market of 1.5%.

Inflation
The inflation projection of Brazil for 2018 was also part of this study.

According to the Ministry's report, the projection of inflation this year in Brazil, it rose from 3.4% to 4.2%, impacted by the rising dollar and the effects of the truckers' strike at the end of May.

The stop truckers, which paralyzed the country for eleven days and generated a significant shortage of supplies, resulted in a 3.34% decline in Brazilian economic activity compared to April.

The strike affected virtually every sector of the economy, especially industry and services.

Industrial production contracted by 10.9% in May, the second largest decline in the historical series, while the service sector, responsible for about 70% of GDP, declined 3.8% in May, its worst result since 2011