SAO PAULO, May 28 (Xinhua) -- Brazil's industrial sector upgraded its economic growth forecast for 2025 to 2.4 percent, up from a previously projected 2 percent, the Federation of Industries of the State of Sao Paulo (FIESP) said Wednesday.
The country's main business association, representing Latin America's largest industrial sector, released its latest figures two days after Brazil's financial market reported that gross domestic product (GDP) could expand by 2.1 percent this year.
In a press release, the FIESP said it expects Brazil's economy to experience a slowdown in GDP growth this year after rising 3.4 percent in 2024.
"The federation's preliminary projections pointed to a gradual slowdown of the economy throughout the year, a movement influenced by the lagging effects of the strongly contractionary monetary policy, which should particularly affect the most cyclical sectors," the FIESP said, referring to the benchmark interest rate currently at 14.75 percent annually.
Government measures to spur demand, such as low-interest loans for workers in the formal sector and the self-employed, "are factors that could sustain economic activity," the federation said.
The FIESP also forecast that gross fixed capital formation (GFCF), a key investment indicator, will continue its upward trend, albeit at a more moderate pace.
Investment should see growth of 4.5 percent in 2025 and 2.6 percent in 2026, following an estimated increase of 7.3 percent in 2024, the industry group added.
In the case of private investment, it estimated an increase of 3.1 percent in 2025 and 0.7 percent in 2026.
In contrast, public expenditure will continue to expand, driven primarily by regional, state and municipal governments.
