Brazil Economic Outlook
June 14, 2022Growth picked up somewhat in Q1 according to recent data, underpinned by a strong positive contribution from the external sector, as exports of goods and services rose sharply. In contrast, private consumption growth was unchanged from Q4, while government consumption growth slowed and fixed investment contracted at the fastest pace since Q2 2021. Investment was likely restrained by higher interest rates and inflation, and political uncertainty ahead of the October general elections. Turning to Q2, available data suggests the economy continues to expand amid fiscal support and as the impact of the pandemic fades, with the manufacturing and services PMIs averaging higher in April–May relative to Q1, and the unemployment rate falling to a fresh multi-year low in April. That said, tighter monetary conditions and double-digit inflation will likely be weighing on activity somewhat.
Brazil Economic GrowthGDP growth is set to slow significantly this year from 2021. Investment is seen contracting amid higher interest rates and soft business sentiment, while growth in consumption and exports is set to slow. The outcome of October’s presidential elections, uncertainty over the fiscal position and the length of the commodity price boom are key factors to watch. FocusEconomics analysts see the economy expanding 1.0% in 2022, which is up 0.3 percentage points from last month’s forecast, and 1.2% in 2023.
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
January 25, 2023
The seasonally adjusted consumer confidence index published by the Getulio Vargas Foundation (Fundação Getúlio Vargas) fell to 85.8 in January from December's 88.0.
January 13, 2023
Economic activity dropped 0.6% month on month in seasonally adjusted terms in November, which was a deterioration from October’s 0.3% decline.
January 11, 2023
Retail sales dropped 0.6% month on month in seasonally-adjusted terms in November (October: +0.3% mom).
January 10, 2023
Inflation dropped for a sixth consecutive month in December; it came in at 5.8%, marginally below November’s 5.9%.
January 5, 2023
Industrial output slid 0.1% in month-on-month seasonally adjusted terms in November, which contrasted October's 0.3% increase.