INSUBCONTINENT EXCLUSIVE:
largest economy in 2025.After a robust 3.4% GDP expansion in 2024, projections for 2025 range from 1.6% to 2.3%
This deceleration stems from a blend of persistent inflation, high interest rates, and fading fiscal stimulus, according to recent CNI and
Analysts expect it to reach 15% by year-end.These high rates have curbed inflation, which financial markets now see at 5.57% for 2025, but
they have also made credit more expensive and investment less attractive.The real cost of borrowing remains among the highest globally, and
this restricts both business expansion and household consumption
Fiscal policy has also tightened
The government has scaled back spending after a period of stimulus in 2024.Industry Leaders Signal Economic Deceleration for Brazil in 2025
(Photo Internet reproduction)Fiscal targets for 2025 will likely be met, but only through additional adjustment measures
Even so, public debt is expected to keep rising, as the primary deficit is projected near 0.6% of GDP.The risk of fiscal slippage remains,
especially with general elections approaching and political pressures mounting for more public outlays
between 1.2 and 1.5 million new formal jobs in 2025, down from over 2.2 million in 2024
The service sector, which accounted for more than half of new jobs last year, will continue to drive employment.Infrastructure projects like
Economists expect a record harvest in 2025, which should invigorate the sector after a weak performance last year.This rebound will help
offset weaker growth in industry and services, but it cannot fully counterbalance the drag from high borrowing costs and cautious fiscal
The trade surplus is forecast at $75 billion in 2025, and foreign direct investment should hold steady at $70 billion.The exchange rate,
however, faces pressure, with the real expected to depreciate to 5.90 per US dollar by the end of the year
The real story behind the numbers is a country adjusting to the limits of its recent growth.Policymakers face tough choices: keep inflation
in check with high rates or risk renewed price pressures by easing too soon
Fiscal restraint is necessary to avoid turbulence, but it slows the recovery.The business environment remains challenging, with structural
