UPDATE 1-Goldman, Citi lift Brazil 2021 GDP growth forecasts to over 5%

(Adds Citi forecast)

BRASILIA, June 1 (Reuters) - Goldman Sachs and Citi on Tuesday raised their Brazilian 2021 gross domestic product growth forecasts to more than 5.0%, among the first in what could be a string of upward revisions from major banks after strong first quarter GDP data.

Alberto Ramos at Goldman Sachs raised his full-year forecast to 5.5% from 4.6%, one of the most bullish outlooks for Latin America’s largest economy, while economists at Citi raised theirs to 5.1% from 3.6%.

“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,” Ramos 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. (Reporting by Jamie McGeever Editing by Chizu Nomiyama and Alexander Smith)