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LatinNews Daily - 28 June 2024

In brief: Brazil’s central bank increases growth forecast

*Brazil’s central bank (BCB) has released the June edition of its quarterly Relatório de Inflação report containing economic projections and other data, which showed an annual GDP growth forecast of 2.3% for 2024. This is up from the 1.9% forecast in the previous edition of the report published in March. In its report, the BCB noted that the increased growth forecast comes despite the economic impact of the heavy storms and floods which have devastated the major farming state of Rio Grande do Sul, the country’s main rice producer. According to its latest projections, Brazil’s agricultural sector is forecast to contract by 2.0% this year, a greater contraction than the 1.0% annual contraction projected in March. However, the industrial and services sectors are expected to compensate for the slump in agriculture, with a 2.7% growth forecast for industry and 2.4% for services, up from 2.2% and 2.0% respectively in the March report. The growth in the industrial sector is projected to be largely driven by construction. The BCB pointed out that the demand for construction companies to rebuild towns, cities, and flood-damaged infrastructure in Rio Grande do Sul is likely to boost the sector’s growth. 

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