Brazil Economic Forecast

Brazil Economic Outlook

July 14, 2015

Gloomy data continues to emerge from Latin America’s largest economy. After two consecutive quarters of growth, Brazil returned to contraction in the first quarter of 2015, driven largely by shrinking private consumption which recorded its worst result since Q4 2008. Economic activity tallied a second consecutive contraction in April and business confidence fell to a new record low in June. Moreover, the government’s austerity measures and economic reforms that were designed to correct fiscal imbalances have become increasingly unpopular. President Dilma Rousseff’s approval ratings have fallen to an all-time low and her administration is facing intensifying opposition in Congress. On 8 July, Congress approved a bill that raises retirement benefits and directly opposes Rousseff’s austerity agenda. While it is widely expected that Rousseff will veto the bill, increasing dissent in Congress will make it difficult for the government to move forward with additional reforms.

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 Yield13.01-1.18 %Jul 30
Exchange Rate3.371.22 %Jul 30
Stock Market49,897-0.69 %Jul 30

Brazil Economic Growth

July 14, 2015

Low commodity prices, austerity and depressed confidence levels continue to hamper Brazil’s economic prospects. The economy is expected to worsen this year and record the largest contraction in over two decades. LatinFocus panelists see the economy contracting 1.4% in 2015, which is down 0.2 percentage points from last month’s forecast. For 2016, panelists see the economy rebounding and growing 0.8%.

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