Brazil Economic Forecast

Brazil Economic Outlook

January 17, 2017

High unemployment, tight credit conditions, political turmoil and weak external demand held Brazil’s economy in the worst recession in modern history last year. While signs of stabilization have emerged, activity is meagre and gains are uneven. Consumer and business confidence both fell to six-month lows in December along with the manufacturing PMI. However, retail sales surged to the best result in over three years in November and the current account deficit came in at a multi-year low. In the political arena, the government continues to progress with reforms. A constitutional amendment to limit social spending was approved in December and an agreement was reached with indebted state Rio de Janeiro to improve their fiscal situation.

Brazil Economy Data

20112012201320142015
Population (million)197199201203204
GDP per capita (USD)13,23712,34212,24411,9158,651
GDP (USD bn)2,6132,4592,4612,4161,769
Economic Growth (GDP, annual variation in %)3.91.93.00.1-3.8
Domestic Demand (annual variation in %)4.72.13.8-0.9-6.8
Consumption (annual variation in %)4.73.53.51.3-4.0
Investment (annual variation in %)6.70.85.8-4.5-14.1
Industrial Production (annual variation in %)0.4-2.32.1-3.0-8.3
Retail Sales (annual variation in %)6.78.44.32.2-4.3
Unemployment Rate8.07.47.16.88.5
Fiscal Balance (% of GDP)-2.5-2.3-3.0-6.1-10.4
Public Debt (% of GDP)35.132.931.233.738.5
Money (annual variation in %)18.79.110.99.96.2
Inflation Rate (CPI, annual variation in %, eop)6.55.85.96.410.7
Inflation Rate (CPI, annual variation in %)6.65.46.26.39.0
Inflation (PPI, annual variation in %)4.19.15.12.211.3
Policy Interest Rate (%)11.007.2510.0011.7514.25
Stock Market (annual variation in %)-18.17.4-15.5-2.9-13.3
Exchange Rate (vs USD)1.862.052.362.663.96
Exchange Rate (vs USD, aop)1.671.952.162.353.34
Current Account (% of GDP)-2.9-3.0-3.0-4.3-3.3
Current Account Balance (USD bn)-77.0-74.2-74.8-104.2-58.9
Trade Balance (USD billion)29.819.42.3-4.019.7
Exports (USD billion)256243242225191
Imports (USD billion)226223240229171
Exports (annual variation in %)26.8-5.3-0.2-7.0-15.1
Imports (annual variation in %)24.5-1.47.4-4.4-25.2
International Reserves (USD)352373359364356
External Debt (% of GDP)11.412.712.514.619.1

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Brazil Facts

ValueChangeDate
Bond Yield10.96-0.50 %Jan 20
Exchange Rate3.17-0.86 %Jan 20
Stock Market64,5210.89 %Jan 20

Brazil Economic Growth

January 17, 2017

After an expected 3.4% contraction in GDP last year, the economy should return to growth in 2017 but activity will be meagre. Analysts see GDP growth at 0.6% in 2017, which is down 0.2 percentage points from last month’s forecast. The recovery is seen gaining speed in 2018 and GDP should increase 2.2%.

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