Brazil's 2024 budget predicts 2.26% economic growth

The budget proposal for the upcoming year, presented to the Brazilian National Congress on Thursday (Aug. 31) by Finance Minister Fernando Haddad and Planning Minister Simone Tebet, slightly adjusts the growth projection for Gross Domestic Product (GDP), which represents the total value of goods and services produced in the country. The revised forecast for 2024 now stands at 2.26 percent, down from the previously stated 2.34 percent.

Alongside the GDP adjustment, other economic indicators have seen revisions compared to the Budget Guidelines Law (LDO) previously submitted to Congress. The LDO, which is drawn up annually, outlines the government's priorities for the upcoming year and serves as the foundation for drafting the Annual Budget Law, aligning with the Multi-Year Plan's objectives.

The forecast for the Broad National Consumer Price Index (IPCA), which gauges the country's official inflation, has also been slightly reduced from 3.52 percent to 3.3 percent for the following year. Additional parameter revisions include the Selic—Brazil’s benchmark interest rate, which is expected to average 9.8 percent per year in 2024, compared to the prior projection of 11.08 percent per year. The average dollar exchange rate forecast has shifted from BRL 5.12 to BRL 5.02.

The congressional document anticipates an average oil barrel price (used to estimate the government's revenue from royalties) of $73.90 for the next year, foresees a 12.09 percent rise in imports (excluding fuel), and a 5.69 percent increase in the nominal wage bill.