The Secretariat of Economic Policy at the Ministry of Economy said in a report that the lower gross domestic product (GDP) growth forecast and the inflation hike were the result of a worsening international situation, due in part to the energy crisis affecting some European countries and the breakdown of production chains that are affecting demand and production.
For 2022, the government also lowered economic growth projections from 2.5 percent to 2.1 percent, while estimated inflation went from 3.75 percent to 4.7 percent.
"The strength of the labor market recovery is sufficient to guarantee growth above 2 percent (for both 2021 and 2022)," the Brazilian government said.
"With the recovery of informal employment, we expect the participation rate and the level of employment to return to historical levels and help the country grow at the projected rate," it added.
According to financial market projections, Brazil's GDP will grow 4.88 percent this year and 0.93 percent in 2022, while inflation rate will be 9.77 percent in 2021 and 4.79 percent in 2022.
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