Brazil Economic Forecast

Brazil Economic Outlook

August 9, 2016

Although economic activity remains feeble, tentative signs of improvement are emerging from Brazil’s battered economy. Industrial production accelerated in June and consumer and business confidence continued to improve in July. In addition, despite growing concerns over global growth, the real has remained resilient and rose to a one-year high on 4 August. Michel Temer’s temporary takeover as president has helped shore up confidence in Latin America’s largest economy, however, not enough has been done to halt the government’s sinking finances. A constitutional amendment to cap public spending is not expected to be passed until next year, while a proposal for a desperately-needed overhaul of the country’s bureaucratic labor laws likely will not be ready until the end of this year. Meanwhile, a final verdict in ousted President Dilma Rousseff’s impeachment case is expected in the coming weeks.

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 Yield11.970.34 %Aug 03
Exchange Rate3.24-0.60 %Aug 03
Stock Market57,0771.63 %Aug 03

Brazil Economic Growth

August 9, 2016

Political uncertainty continues to tilt risks to Brazil’s forecast to the downside. A swift implementation of economic reforms and a fiscal adjustment are key to correcting the country’s macroeconomic imbalances, yet this hinges on a stable political situation. FocusEconomics panelists see the economy contracting 3.3% in 2016, which is unchanged from last month’s forecast. For 2017, the panel sees the economy starting to recover meekly and growing 0.9%.

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