Brazil Economic Forecast

Brazil Economic Outlook

September 13, 2016

Brazil’s tattered economy improved in the second quarter, recording the smallest contraction in a year. The result came on the back of a less abysmal performance from the domestic economy, although broad-based declines were still recorded throughout. The economy appears to have picked up from rock bottom, but economic data is still poor. The unemployment rate hit a multi-year high in July and the current account—which had been a bright spot in Brazil’s economy—recorded a second consecutive deficit. On a positive note, political turbulence is likely to subside after Dilma Rousseff was impeached on 31 August. Michel Temer will fulfill the remainder of Rousseff’s term and the end of the impeachment trial should allow the government to turn its full attention to badly-needed economic reforms.

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 Yield11.87-0.17 %Sep 23
Exchange Rate3.250.75 %Sep 23
Stock Market58,697-0.50 %Sep 23

Brazil Economic Growth

September 13, 2016

Greater political stability and an improvement in economic data is helping lift Brazil’s outlook. However, ongoing challenging political conditions, which could lead to slow reform implementation or watered down austerity measures, limit the country’s growth trajectory. FocusEconomics Consensus Forecast panelists expect that the economy will contract 3.2% this year, which is up 0.1 percentage points from last month's forecast. Next year, the panel expects GDP to rebound to a 1.0% expansion.

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