Brazil Economic Forecast

Brazil Economic Outlook

August 11, 2015

Brazil’s economy continues to disappoint. After two consecutive quarters of growth, Latin America’s largest economy shrunk in the first quarter of 2015, dragged down by falling private consumption, which recorded its worst result in over six-years. More recently, retail sales lost steam in May and industrial production swung back to a contraction in June. The gloomy economic data and increasing political uncertainty have caused confidence levels to languish at low levels, with consumer confidence plummeting to a new record low in July. The economy’s poor performance has caused tax revenues to dive and on 22 July the government asked Congress to approve a significant reduction to its 2015 primary budget surplus target. The government revised its target down from a primary surplus of 1.10% of GDP to a meagre 0.15% of GDP. Moreover, there is still a possibility that the government could miss this target if the economy deteriorates further than expected or political support for austerity measures wanes.

Brazil Economic Data

20102011201220132014
Population (million)195197199201203
GDP per capita (USD)11,30613,24012,10411,87811,567
GDP (USD bn)2,2102,6142,4122,3882,345
Economic Growth (GDP, annual variation in %)7.63.91.82.70.1
Domestic Demand (annual variation in %)9.54.72.03.9-0.9
Consumption (annual variation in %)6.44.83.92.90.9
Investment (annual variation in %)17.86.6-0.66.1-4.4
Industrial Production (annual variation in %)10.20.4-2.32.1-3.2
Retail Sales (annual variation in %)10.96.78.44.32.2
Unemployment Rate6.76.05.55.44.8
Fiscal Balance (% of GDP)-2.5-2.6-2.5-3.3-6.7
Public Debt (% of GDP)39.737.136.034.337.4
Money (annual variation in %)16.718.79.110.99.9
Inflation Rate (CPI, annual variation in %, eop)5.96.55.85.96.4
Inflation Rate (CPI, annual variation in %)5.06.65.46.26.3
Inflation (PPI, annual variation in %)13.94.19.15.12.2
Policy Interest Rate (%)10.7511.007.2510.0011.75
Stock Market (annual variation in %)1.0-18.17.4-15.5-2.9
Exchange Rate (vs USD)1.661.862.052.362.66
Exchange Rate (vs USD, aop)1.761.671.952.162.35
Current Account (% of GDP)-2.1-2.0-2.2-3.4-4.4
Current Account Balance (USD bn)-47.3-52.5-54.2-81.2-104.0
Trade Balance (USD billion)20.129.819.42.3-4.0
Exports (USD billion)202256243242225
Imports (USD billion)182226223240229
Exports (annual variation in %)32.026.8-5.3-0.2-7.0
Imports (annual variation in %)42.324.5-1.47.4-4.4
International Reserves (USD)289352373359364
External Debt (% of GDP)11.611.413.012.914.8

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Brazil Facts

ValueChangeDate
Bond Yield14.170.0 %Aug 25
Exchange Rate3.621.81 %Aug 25
Stock Market44,5450.47 %Aug 25

Brazil Economic Growth

August 11, 2015

Austerity measures, high inflation and depressed confidence are expected to dampen private consumption further this year and cement the economy’s downward trajectory. LatinFocus panelists see the economy recording its worst result in over two decades and tallying a 1.7% contraction in 2015, which is down 0.3 percentage points from last month’s forecast. For 2016, panelists see the economy rebounding and growing 0.3%.

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