By Jamie McGeever
BRASILIA (Reuters) -Goldman Sachs, Citi and BNP Paribas (OTC:BNPQY) on Tuesday raised their Brazilian 2021 gross domestic product growth forecasts to more than 5.0%, leading a string of upward revisions from major banks after strong first-quarter GDP data.
Economists at Goldman Sachs (NYSE:GS) and BNP Paribas raised their full-year forecast to 5.5% from 4.6% and 4.5%, respectively, among the most bullish outlooks for Latin America's largest economy, while economists at Citi raised theirs to 5.1% from 3.6%.
Economists at Credit Suisse (SIX:CSGN) raised their forecast to 4.9% from 4.0%, and their counterparts at Barclays (LON:BARC) upped theirs to 4.8% from 4.3%.
"We expect the economy to recover visibly in coming quarters in tandem with further progress on the Covid vaccination front, gradual reopening of the economy, renewed fiscal stimulus, (and) recovering consumer and business confidence," Alberto Ramos at Goldman Sachs wrote.
Official figures on Tuesday showed that GDP expanded by 1.2% in the first quarter, a faster rise than economists had expected as rebounding services and investments took Latin America's largest economy to its pre-pandemic size at the end of 2019.
Ramos said his outlook assumes no energy supply shortages resulting from the drought affecting Brazil, an easing of supply-chain bottlenecks and a better COVID-19 picture.
Leonardo Porto and his team at Citi said the "impressive" figures suggest the economy has built up a resilience to the pandemic and adopted strategies to cope with it, particularly in areas such as services.
"Confidence indicators for April and May are suggesting a faster recovery after the trough in March (especially in commerce and services), improving our GDP assessment for the current quarter," towards 5.1% full-year growth, they wrote.
They all warned, however, that next year is looking far less rosy, with Barclays and Citi projecting growth of less than 2%.