(Adds UBS forecast)
BRASILIA, May 13 (Reuters) – Several big international banks have raised their forecasts for Brazilian economic growth this year, after a closely-watched central bank index of economic activity for March suggested Latin America’s largest economy expanded in the first quarter.
Economists at Barclays, Goldman Sachs, JP Morgan, UBS and Credit Suisse all moved on Thursday, raising their gross domestic product growth forecasts for 2021 to at least 4%.
Alberto Ramos and Fabio Ramos at Goldman and UBS offered the most bullish predictions of 4.5% growth, and Ramos at UBS made the biggest change in outlook, to 4.5% from 3.0%.
“The overall economic performance has been far less feeble than what we expected a couple of months ago,” said Ramos at UBS.
Cassiana Fernandez at JP Morgan said: “Today’s March IBC-Br (central bank economic activity index) came in stronger than expected. Taking together the data readings of the last three months … we are revising up our 2021 GDP forecast to 4.1%, from 2.9% previously.”
The central bank said its IBC-Br economic index activity index fell 1.59% in March, less than half the 3.75% decline forecast in a Reuters poll of economists.
That meant the index rose 2.3% in the first quarter of the year.
Several other indicators suggest Brazil’s economy has so far weathered a deadly second wave of the COVID-19 pandemic better than many observers had predicted. A technical recession of two consecutive quarters of negative growth had been mooted.
Solange Srour at Credit Suisse raised her 2021 GDP growth forecast to 4.0% from 3.6% and Roberto Secemski at Barclays raised his to 4.3% from 3.2%. Both noted that early indications for the second quarter are not as bad as originally feared.
The government’s official 2021 GDP growth forecast is 3.2%, although Economy Minister Paulo Guedes has said 4% or even more could be on the cards. The central bank’s forecast is 3.6%. (Reporting by Jamie McGeever Editing by Catherine Evans, David Gregorio and Sam Holmes)
