Brazil Economic Outlook
September 12, 2017
Recently-released data indicates that GDP grew for the first time in over three years in Q2, confirming that the economy has turned a corner. The upturn was largely due to tailwinds to private consumption from falling inflation and a one-off decision allowing workers to make early withdrawals from a government severance fund. Export growth also accelerated in the quarter. The recovery remains tentative despite the good news, and incoming data for Q3 is patchy: consumer confidence fell to a seven-month low in August, while the manufacturing PMI recovered some lost ground. On the political front, developments have also been mixed. In September, a critical reform to reduce subsidized lending for businesses from government-owned bank BNDES was passed, which faced heavy opposition from industry leaders, but should help correct government finances and improve the effectiveness of monetary policy. While the reform is a win for the government, austerity measures are still facing an uphill battle, as underscored by the government’s easing of budget targets. Unable to convince legislators to support tax hikes, the government announced it would revise upwards its primary deficit targets for all years through 2020.Brazil Economy Data
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Brazil Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 9.63 | -0.72 % | Sep 21 |
| Exchange Rate | 3.14 | 0.17 % | Sep 21 |
| Stock Market | 75,604 | -0.53 % | Sep 21 |
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Brazil Economic Growth
September 12, 2017
Battered government finances and an uncertain outlook for reforms given the fragile political environment are threatening the economic recovery, despite a positive Q2 GDP print. Local media reported that President Michel Temer is likely to face another corruption charge in the coming weeks, which could push reforms to the back burner. Our panelists see GDP growing a measly 0.6% in 2017, which is up 0.2 percentage points from last month’s forecast. Next year, the recovery is seen gaining speed and GDP increasing 2.2%.Brazil Economic News
Brazil: Inflation falls to lowest level in 18 years
September 6, 2017
Consumer prices in August rose 0.19% over the previous month, which was below July’s 0.24% rise and notably undershot analysts’ forecasts of a more pronounced 0.31% rise.
Brazil: Central Bank slashes SELIC rate to 8.25%
September 6, 2017
At its 6 September meeting, the Central Bank’s Monetary Policy Committee (COPOM, Comité de Politica Monetaria) decided to cut the benchmark SELIC interest rate by 100 basis points, keeping the size of easing unchanged from the previous meeting.
Brazil: Industrial production growth accelerates in July
September 5, 2017
In July, industrial production growth came in at 0.8% over the previous month in seasonally-adjusted terms, which was an acceleration from June’s revised 0.2% increase (previously reported: 0.0% month-on-month).
Brazil: Economic activity rebounds in June
September 4, 2017
In June, economic activity rose 0.5% 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).
Brazil: Manufacturing PMI rises in August
September 1, 2017
Conditions in Brazil’s manufacturing sector improved mildly in August.
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