Brazil Economic Forecast

Brazil Economic Outlook

October 10, 2017

Incoming data points to a gradual improvement in the Brazilian economy following the rebound in GDP in Q2. The unemployment rate fell more than expected in the three months up to August, extending a streak of gains seen since March. Business and consumer confidence also improved slightly in September, while the manufacturing PMI pointed to expansion for a sixth consecutive month. Despite the improvement in economic data, political turbulence is casting a long shadow on the strength of the recovery. President Michel Temer is facing another criminal corruption charge, his second in two months. While it is widely expected that Temer has enough support in Congress to avoid a trial—two-thirds of the Lower House must vote in favor of a trial for the case to move to the Supreme Court—the accusations have further dented Temer’s already abysmal popularity and his reform agenda could lose steam as politicians’ distance themselves from him as the October 2018 general election draws near. Despite all the political noise, the government managed to make some progress on its reform agenda and auctioned off several oil blocks and hydroelectric dams in recent weeks.

Brazil Economy Data

Population (million)199201203204206
GDP per capita (USD)12,36412,27812,1068,7928,731
GDP (USD bn)2,4642,4682,4551,7981,799
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)0.85.8-4.2-13.9-10.2
Industrial Production (annual variation in %)-2.32.1-3.0-8.3-6.5
Retail Sales (annual variation in %)
Unemployment Rate7.
Fiscal Balance (% of GDP)-2.3-3.0-6.0-10.2-9.0
Public Debt (% of GDP)53.751.556.365.569.9
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Policy Interest Rate (%)7.2510.0011.7514.2513.75
Stock Market (annual variation in %)7.4-15.5-2.9-13.338.9
Exchange Rate (vs USD)2.052.362.663.963.25
Exchange Rate (vs USD, aop)1.952.162.353.343.48
Current Account (% of GDP)-3.0-3.0-4.2-3.3-1.3
Current Account Balance (USD bn)-74.2-74.8-104.2-59.4-23.5
Trade Balance (USD billion)19.42.3-4.019.747.7
Exports (USD billion)243242225191185
Imports (USD billion)223240229171138
Exports (annual variation in %)-5.3-0.2-7.0-15.1-3.1
Imports (annual variation in %)-1.47.4-4.4-25.2-19.8
International Reserves (USD)373359364356365
External Debt (% of GDP)13.312.714.418.618.0

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Brazil Facts

Bond Yield9.63-0.82 %Oct 19
Exchange Rate3.17-0.13 %Oct 19
Stock Market76,283-0.40 %Oct 19

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Brazil Economic Growth

October 10, 2017

FocusEconomics see the economy growing a measly 0.7% in 2017 as falling investment and austerity measures dampen growth. Next year, the recovery is seen gaining speed with GDP expanding 2.3%, which is up a notch from last month’s forecast. Low inflation and looser monetary policy should help revive the domestic economy, although uncertainty is high given the election year.

Brazil Economic News

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