Brazil Economic Forecast

Brazil Economic Outlook

June 14, 2016

Brazil’s economy remained mired in the deepest recession in recent history in the first quarter of the year, although the pace of contraction did improve slightly. Exports, which have been a bright spot in recent data, hit an over-four-year high in Q1 thanks to a weaker real, while data from the domestic economy remained abysmal. In the political arena, all eyes are on new interim President Michel Temer to see if he can right the sinking economy and avoid the setbacks the Rousseff administration had faced. While early signs suggested that Temer’s government had started on the right foot—Congress approved his target of a budget deficit in May—recent developments are less encouraging. Two government ministers have resigned, and in June, the prosecutor general requested that four prominent members of Temer’s party be arrested in connection with the Petrobras scandal.

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 Yield12.65-0.71 %Jun 21
Exchange Rate3.420.63 %Jun 21
Stock Market50,8381.01 %Jun 21

Brazil Economic Growth

June 14, 2016

The slight improvement in GDP data for Q1 is supporting an upward revision to the forecast. However, despite the change in leadership, Brazil’s economy is expected to remain in a profound recession this year. FocusEconomics panelists see the economy contracting 3.4% in 2016, which is up 0.3 percentage points from last month’s forecast. For 2017, the panel sees the economy recovering slightly and growing 0.8%.

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