Brazil Economic Outlook
November 10, 2020After GDP plunged at a record pace in Q2, the economy likely rebounded in Q3. Activity in the goods sector seemingly bounced back, with industrial production growing strongly in the quarter and retail sales climbing in July–August, bolstered by the emergency pandemic payments. Moreover, the manufacturing PMI remained firmly in expansionary territory in Q3, while confidence in the industrial sector rebounded in September. Turning to Q4, incoming data paints a mixed picture. Both the manufacturing PMI and business confidence hit new record highs in October, boding well for investment. However, consumer sentiment turned more pessimistic in the same month, hinting that the recovery could be losing momentum. In other news, on 3 November, the Senate passed the central bank autonomy bill, which would limit political interference in monetary policy. The bill still requires approval from the lower house of Congress, however.
Brazil Economic GrowthAfter this year’s projected contraction due to the Covid-19 hit, the economy is seen rebounding strongly in 2021 as domestic and foreign demand recover. However, the gradual reducing of fiscal stimulus as the coronavirus shock fades, an elevated unemployment rate and ballooning public debt represent downside risks to the outlook. FocusEconomics analysts see the economy rebounding and growing 3.4% in 2021, which is down 0.1 percentage points from last month’s forecast. In 2022, panelists see GDP growth at 2.5%.
Brazil Economy Data
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|Bond Yield||6.79||-0.82 %||Dec 31|
|Exchange Rate||4.02||-0.13 %||Jan 01|
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Brazil Economic News
February 12, 2021
Economic activity grew 0.6% month-on-month in seasonally-adjusted terms in December (November: +0.7% mom).
February 10, 2021
Retail sales collapsed 6.1% month-on-month in seasonally-adjusted terms in December (November: -0.1% mom), marking the steepest fall since April.
February 9, 2021
Consumer prices increased a seasonally-adjusted 0.25% in January over the previous month, moderating from the 1.35% increase recorded in December and marking the softest rise in prices since August 2020.
February 2, 2021
Industrial output rose 0.9% month-on-month in seasonally-adjusted terms in December (November: +1.1% mom), marking the worst reading since April—albeit coming in above market analysts’ expectations of a 0.2% rise.
February 1, 2021
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, fell to 56.6 in January, a notable drop from December’s 61.5.