RIO DE JANEIRO, Sept. 28 (Xinhua) -- Brazil's Institute for Applied Economic Research (Ipea) announced Thursday a projection for the country's gross domestic product (GDP) growth in both 2017 and 2018, indicating a positive outlook.
According to Ipea, Brazil's GDP will grow by 0.7 percent this year and 2.6 percent in 2018. The institute said the growth rate to be registered in 2017 will take family consumption, exports and the agricultural sector into account.
The industrial and tertiary sector will start to recover in the third quarter and relevant GDP data will be released in December, said Ipea.
In the first half of 2017, Brazil's GDP registered zero growth compared to the same period in 2016. In the second quarter of the year, the GDP was up 0.2 percent compared to the first three months. In 2016, the Brazilian economy suffered a 3.6 percent contraction.
The projection for 2018 shows a decrease -- the previous projection was for a 3.4 percent growth rate. According to Ipea, the decline stems from the social security reform which has not been approved yet. The reform is controversial and the government is reportedly having difficulties in getting enough support to submit it to a congressional vote.
Ipea estimated that the Brazilian economy will be promising in 2018, and that the domestic economy will gain momentum from reduction of the annual basic interest rate to 7 percent by the end of 2017 and its maintenance at this level in 2018. That figure is currently at 8.25 percent.
In addition, Ipea estimated an inflation rate of 2.9 percent in 2017 and 4.2 percent in 2018. The accumulated inflation from January to August in 2017 was 2.46 percent.
