The first half of 2024 has come to an end, and now we are officially in the second half of the year. It is natural that some plans have come to fruition, while others may not have come out as expected. But when it comes to the economic situation in Brazil, what can we expect for the next six months?
According to data released by the International Monetary Fund (IMF), the new projections position Brazil as the 8th largest global economy in 2024. This advance stems from a forecast of growth of 2.2% in Gross Domestic Product (GDP), reflecting a steady expansion pace. Such growth is driven by the sectors of trade, services and agriculture, in addition to the increase in investments and consumption of households, favored by the reduction of the Selic rate and the fall in the unemployment rate.
However, despite the latest drops in the Selic rate, the current level of basic interest rates in the country is still an impediment for those who think about taking risk, undertaking or starting a business activity. After all, just leaving the money stopped, yields inflation (IPCA) and another 6.4% per year. Entrepreneurial activity really needs to have a very attractive profitability for the investor to decide to take the risk. It is urgent that interest rates continue to fall in a healthy way, without pulling it to the force.
And for interest rates to continue to fall, it is necessary that all economic agents have confidence in the monetary authority, and that inflation expectations are, in the jargon of experts, “ancoradas”, which means that they must converge to a certain oscillation band, without any surprises, which calms the mood and favors the creation of an environment in which more people are confident to invest here in the long term, since their investments will not be eroded by inflation.
We must pay close attention to the current economic situation and consider how we will be affected as citizens. Many economic issues may seem irrelevant to our daily lives, but when we analyze them more closely, we realize their inevitable impacts.An example of this is the trade balance, which this year has more imports and fewer exports, compared to the previous year.
Another fact that highlights this concern is the food prices, which had fallen in 2023, but should suffer again with inflation. This happens due to adverse weather events by the country and the world, especially with the tragedy of the rains that affected Rio Grande do Sul. The Focus Bulletin highlights an increase in the price of these products at an intensity higher than the general inflation, which should end the year around 3.96%.
In addition, we also have the issue involving the increase in the dollar, which directly affects our internal inflation rates and ends up being, again, reflected in people's daily lives. With the increase in the dollar, we may feel impacts on the prices of imported products, the production costs of companies and also on inflationary expectations. And those who plan to travel abroad or make exchanges outside the country, face another challenge, which is the devaluation of the real.
In short, there are many variables to be aware of. Therefore, if you do not have a well-structured financial plan adapted to your reality, it is much more likely that you will get lost in this vastness of news and events, which become mere noises in longer time windows. Therefore, assemble your planning (or review what you already have), thinking about the need to invest, always looking at the long term.
What to expect economically from the second half of 2024?
