By Ovunc Kutlu
ISTANBUL (AA) - The International Monetary Fund (IMF) said Tuesday that it expects Brazil's economic growth to average 2.5% over the medium term, an upward revision from its 2% estimate made last year.
"Over the past two years, Brazil’s economy has shown remarkable resilience as inflation has declined to within the target interval," the IMF said in a statement after completing its Article IV Consultation with Brazilian authorities.
Economic growth is projected to moderate to 2.1% this year, down from 2.9% last year but rising to 2.4% next year.
"The careful pace of monetary easing has been appropriate and consistent with the inflation targeting framework," it said. "As disinflation proceeds, with inflation projected to remain within the target interval, maintaining flexibility on the pace and length of the easing cycle is prudent given a tight labor market and above-target inflation expectations."
The IMF said it estimates Brazil's inflation to reach 3.7% by the end of 2024 and converge to the 3% target in the first half of 2026.
Consumer inflation in the South American economy annually increased 3.69% in April, slowing its pace from a 3.93% year-on-year gain recorded in March.
Early this month, Brazil's central bank lowered its benchmark interest rate by 25 basis points to 10.50%.
Banco Central do Brasil last implemented a rate hike of 50 basis points in August 2022, bringing the rate to 13.75%. It lowered its interest rate by 50 basis points to 13.25% in August 2023, its first rate cut in three years.