Brazil Economic Outlook
February 13, 2018Hard data for the fourth quarter suggests the recovery gained steam, after GDP grew at the fastest pace since Q1 2014 in the third quarter. Economic activity inched up in November, and industrial production grew at the fastest pace in over two years in December. In addition, the unemployment rate edged down in Q4, boding well for private consumption in the period. Early data for 2018 also points to improving economic conditions: Consumer sentiment rose to a multi-year high in January. Meanwhile, political events are dominating the discourse and generating uncertainty in financial markets. On 24 January, the Ibovespa—Brazil’s benchmark stock index—surged to a record high, after an appeals court held up former President Luiz Inácio Lula da Silva’s corruption sentence. The ruling could make Lula ineligible to run for presidency in October’s vote; however, Lula maintains his innocence and will likely keep fighting the charges. Heightened uncertainty in the run-up to the elections could generate volatility in Brazil’s exchange rate and in financial markets.
Brazil Economic GrowthAccommodative monetary policy and improved confidence should fuel high growth this year. Keeping the recovery on track will require a reform-minded president, however, and it is difficult to judge if the election will yield a market-friendly outcome. FocusEconomics panelists see the economy growing 2.5% in 2018, which is unchanged from last month’s forecast. In 2019, growth is seen edging up to 2.7%.
Brazil Economy Data
5 years of Brazil economic forecasts for more than 30 economic indicators.
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|Bond Yield||9.83||-0.82 %||Feb 22|
|Exchange Rate||3.25||-0.13 %||Feb 22|
|Stock Market||86,686||-0.40 %||Feb 22|
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Brazil Economic News
February 19, 2018
In December, economic activity rose 1.4% from the previous month in seasonally-adjusted terms, according to the Central Bank’s monthly indicator for economic activity (IBC-Br, Indice de Atividade Economica do Banco Central).
February 9, 2018
In December, industrial production grew 2.8% over the previous month in seasonally-adjusted terms, up from the revised 0.3% increase (previously reported: +0.2% month-on-month) registered in November.
February 9, 2018
Retail sales (excluding cars and construction) fell 1.5% from the previous month in seasonally-adjusted terms in December, which contrasted November’s revised 1.0% increase (previously reported: +0.7% month-on-month). Declines were seen nearly across the board, with only two of the eight components of the index seen growth in sales.
February 7, 2018
At its 7 February meeting, the Central Bank of Brazil’s Monetary Policy Committee (Comité de Politica Monetaria, COPOM) decided to cut the benchmark SELIC interest rate by 25 basis points, a smaller cut than the 50 basis-point reduction it made at the previous meeting.
February 7, 2018
Consumer prices in January rose 0.29% over the previous month, below December’s 0.44% rise.