Brazil Economic Outlook
March 13, 2018Growth accelerated notably in the last quarter of 2017, although it fell short of market expectations. It was led by strengthening household spending on the back of falling unemployment and low inflation and a turnaround in fixed investment. According to available indicators, the positive economic momentum seems to have carried over into the first quarter of this year. In January, the current account deficit narrowed year-on-year. Moreover, in February business confidence moved into optimistic territory for the first time since mid-2013, and the manufacturing PMI rose on the back of solid domestic demand and job creation. However, in the same month, consumer confidence dipped, remaining deeply entrenched in pessimistic territory. The government’s decision to postpone the reform of the country’s generous pension system prompted Fitch Ratings to downgrade Brazil’s credit rating from BB to BB- in late February. Fitch, which also revised the outlook from stable to negative, cited the bulky government debt and troubled political environment as additional reasons for the downgrade.
Brazil Economic GrowthManageable inflation and improving labor market conditions should underpin consumer spending this year. A rebound in fixed investment is expected on the back of more favorable financing conditions due to monetary easing and rising business confidence. However, a market-unfriendly outcome from October’s elections poses the main downward risk to the outlook. FocusEconomics panelists see the economy growing 2.5% in 2018, unchanged from last month’s forecast, and 2.7% in 2019.
Brazil Economy Data
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|Bond Yield||9.49||-0.82 %||Mar 15|
|Exchange Rate||3.29||-0.13 %||Mar 15|
|Stock Market||84,928||-0.40 %||Mar 15|
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Brazil Economic News
March 14, 2018
Retail sales (excluding cars and construction) rose 0.9% from the previous month in seasonally-adjusted terms in January, which contrasted December’s revised 0.5% decrease (previously reported: -1.5% month-on-month).
March 12, 2018
Consumer prices in February rose 0.32% over the previous month, above January’s 0.29% rise.
March 6, 2018
In January, industrial production contracted 2.4% over the previous month in seasonally-adjusted terms, contrasting the revised 3.1% increase (previously reported: +2.8% month-on-month) registered in December.
March 6, 2018
Brazil’s current account balance came in at a deficit of USD 4.3 billion in January, a smaller gap than the USD 5.1 billion deficit recorded in January 2017. The trade surplus came in at USD 2.8 billion in January, which was slightly above January 2017’s USD 2.7 billion surplus.
March 6, 2018
Conditions in Brazil’s manufacturing sector strengthened in February according to the IHS Markit manufacturing Purchasing Managers’ Index (PMI), which rose from 51.2 in January to 53.2.