IMF: Brazil to return to the ranking of 10 largest economies this year
The Lula government’s implementation of macroeconomic measures has had a positive impact on the economy
Brazil is set to return to the world’s top 10 largest economies in 2023, according to new forecasts from the International Monetary Fund (IMF). Brazil dropped out of the top 10 in 2020, and last year it ranked 11th.
The Lula government’s implementation of macroeconomic measures aimed at restarting growth had a positive impact in the first half of the year, with increased employment, industrial recovery and lower inflation. Against this backdrop, the IMF raised its growth forecast for the Brazilian economy and now predicts a 3.1 per cent increase in GDP (gross domestic product) this year, up from the previous forecast of 2.1 per cent.
As a result of the economic recovery, the IMF predicts that Brazil will climb two positions this year to become the 9th largest economy in the world. By 2021, a decade after overtaking the UK in 2011 to reach 6th place under Dilma Rousseff’s government, Brazil had slipped to 13th place.
In April, the fund predicted that by 2023, Brazil would have the world’s 10th largest economy with a GDP of $1.920 trillion at current prices. In its latest report released last week, the IMF now estimates Brazil’s GDP at US$2.126 trillion at year-end, higher than forecasts for Canada (US$2.117 trillion and Russia (US$1.862 trillion).
Rodrigo Valdez, director of the IMF’s Western Hemisphere Department, noted some factors contributing to Brazil’s recovery in the rankings, such as the changing economic outlook, the structural reforms undertaken by the government, and the strengthening of agriculture. In June, for example, President Lula announced the largest “Plano Safra/Crop Plan” in the country’s history, allocating R$364.22 billion (US$72.2 billion) to support agricultural production.
“The upward revision to the 2023 forecast from July reflects stronger-than-expected growth in Brazil, driven by a dynamic agriculture and robust services sector in the first half of 2023,” said the IMF report, which recognises the efforts of Lula’s government.
According to IMF calculations, Brazil should drop one position in the ranking to 10th place in 2025 and rise to 8th place in the world in 2026, as reported by Toda Palavra, a partner of TV BRICS.
“Plano Safra” is an agriculture-focused plan that aims to stimulate the production of organic, agroecological food that promotes healthier lifestyles.