RIO DE JANEIRO, July 20 (Xinhua) -- The Brazilian government on Friday cut its forecast for gross domestic product (GDP) growth and raised the estimate for the inflation rate in 2018.
The latest Income and Debt Report released by Brazil's Ministry of Planning, Budget and Management estimated that the GDP would grow by 1.6 percent this year, a significant reduction from the 2.5 percent foreseen in the previous edition of the report, which is published every two months and produced in collaboration with the Finance Ministry.
The reduced GDP growth estimate was attributed to the impacts of the 10-day nationwide truckers' strike in late May, the reduced liquidity in global markets, the expectation of an interest rate hike in the United States, and the rising uncertainty in Brazil's domestic scenario.
The estimate for the country's inflation index, the National Broad Consumer Price Index (IPCA), on the other hand, rose from 3.4 to 4.2 percent in this edition of the report.
The rise in inflation is also due to the truckers' strike and the U.S. dollar's rise against the Brazilian real in recent months, according to the authorities.
The exchange rate between the U.S. dollar and the Brazilian real hit 3.77 currently, and the U.S. currency has been accumulating an appreciation of 13.89 percent since the beginning of the year.
The estimates for the 2019 GDP growth fell from 3.3 to 2.5 percent.
According to Fabio Kanczuk, Brazil's secretary of economic policy, despite the reduction, the economy is showing some recovery, as shown by some indicators in June. He said that with fiscal efforts and a reduction in the uncertainty, next year's figures could be better.
