XP(US:XP) Prnewswireยท2025-04-22 12:30Core Viewpoint - XP Inc. has released a more optimistic outlook for the Brazilian economy, projecting GDP growth of 2.3% in 2025 and 1.5% in 2026, up from previous forecasts of 2.0% and 1.0% respectively [1][2] Economic Indicators - The upward revision in GDP forecasts is attributed to strong job market performance, resilient household income, and recent federal government stimulus measures [2] - Key stimulus measures include additional funding for the "Minha Casa Minha Vida" housing program, payroll-deductible credit expansion, and fiscal incentives for low and middle-income households [2] Inflation and Monetary Policy - Inflation forecast remains at 6.0% for 2025, with a revision to 4.7% for 2026 due to higher growth expectations and potential inflationary effects from income tax reform [5] - The Brazilian Real (BRL) is forecasted to maintain a value of 6.00 per USD by year-end, although risks are associated with global trade disruptions and commodity price volatility [5] - The Chief Economist at XP emphasizes that while monetary policy is currently effective, achieving sustained inflation reduction and lower interest rates will require clarity on fiscal consolidation and structural reforms [3][4] Fiscal Challenges - XP projects that the Brazilian government will need to raise an additional BRL 110 billion (approximately USD 18.3 billion) in revenue to meet the surplus target for 2026, indicating ongoing fiscal balance challenges [5]