Brazil Economic Outlook
September 10, 2019The economy rebounded solidly in the second quarter, with growth exceeding expectations. The upturn was spearheaded by a pick-up in investment amid loose monetary policy and improved industrial activity. In addition, exports improved although still remained weak overall due to evaporated demand from Argentina and a subdued external backdrop. Incoming data for the third quarter has been mixed so far, suggesting that the acceleration may have been short-lived: While consumer and business sentiment rose in August, industrial production contracted again in July and the current account recorded the largest deficit since 2015 in the same month. On the political front, the crucial pension reform cleared another hurdle after gaining a Senate committee’s approval on 4 September. The committee also voted to make some minor amendments in another bill, which could boost savings for local governments.
Brazil Economic GrowthEconomic growth is expected to remain in the doldrums this year as collapsed demand from Argentina, slowing growth in China, global trade tensions and problems in the mining sector combine to hamper export growth and investment. That said, lower interest rates should provide a boost to momentum, while faster-than-expected passing of reforms could help rejuvenate confidence. FocusEconomics analysts project growth of 1.0% this year, which is unchanged from last month’s forecast, and 2.1% in 2020.
Brazil Economy Data
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|Bond Yield||7.30||-0.82 %||Sep 04|
|Exchange Rate||4.10||-0.13 %||Sep 04|
|Stock Market||101,201||-0.40 %||Sep 04|
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Brazil Economic News
September 18, 2019
At its 17–18 September meeting, the Central Bank of Brazil’s Monetary Policy Committee (COPOM) unanimously decided to chop the benchmark SELIC interest rate from 6.00% to a new historical low at 5.50%.
September 10, 2019
Retail sales (excluding cars and construction) rose 1.0% from the previous month in seasonally-adjusted terms in July, which followed June’s revised 0.5% growth (previously reported: +0.1% month-on-month) and marked the best reading since November 2018.
September 6, 2019
Consumer prices rose 0.11% in August over the previous month, which was below July’s 0.19%.
September 5, 2019
The Brazilian real weakened notably against the U.S. dollar in August, recording its worst month in four years, before recovering mildly at the start of September.
September 3, 2019
Industrial production fell 0.3% month-on-month in seasonally-adjusted terms in July, which followed June’s revised 0.7% fall (previously reported: -0.6% month-on-month) and marked the third contraction in a row.