The International Monetary Fund (IMF) has elevated Brazil's growth projections for 2018 and 2019, estimating that the country's gross domestic product (GDP) is now likely to grow 1.9% this year (0.4 p.p. above October projections) and 2.1% in 2019 (0.1 p.p. above October).

Released on Monday (22), the World Economic Outlook, a periodic report published by the institution, highlighted that global economic activity saw an estimated 3.7% growth in 2017, 0.1 percentage point above the projections of the last edition of the report in October. The IMF also predicted global growth rates of 3.9% in 2018 and 2019, up 0.2 p.p. from the previous report.

According to the document, the improved numbers reflect, among other factors, " the expected impact of the recently approved U.S. tax policy changes". It also highlights that Latin America should see new momentum in its economic recovery, with growth rates of 1.9% in 2018 (as predicted in October) and 2.6% in 2019 (0.2 p.p. above the October forecast).

"This change primarily reflects an improved outlook for Mexico, benefiting from stronger U.S. demand, a firmer recovery in Brazil, and favourable effects of stronger commodity prices and easier financing conditions on some commodity-exporting countries," the document says.