Brazil Economic Outlook
May 19, 2020The panorama has further darkened at the outset of the second quarter, after the coronavirus first hit the economy in the first quarter. Industrial output fell at the sharpest rate in nearly two years in March, while retail sales dropped at the fastest pace in over four years in the same month, reflecting the impact of social distancing measures. Turning to Q2, the manufacturing PMI fell to a record low in April as factory closures and weaker demand battered production and new orders. Meanwhile, on 6 May, the lower house of Congress passed the “war budget”, unlocking an estimated BRL 600-800 billion for recovery measures, while also giving the Central Bank permission to undertake quantitative easing to shore up the economy. Moreover, the Senate approved a BRL 60 billion aid package to help the states; however, the bill is pending President Bolsonaro’s final approval. Meanwhile, against the current backdrop, Fitch Ratings revised Brazil’s BB- credit rating outlook to “negative” from “stable”.
Brazil Economic GrowthGDP is expected to fall this year as the Covid-19 pandemic deals a heavy blow to the economy. Containment measures are seen hammering private consumption and investment, while feeble global demand will cripple exports. Although fiscal and monetary stimulus should provide a cushion, the extent of the shock and political tensions further cloud the outlook. FocusEconomics analysts project the economy will contract 4.8% in 2020, which is down 1.6 percentage points from last month’s estimate, before growing 3.3% in 2021.
Brazil Economy Data
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|Bond Yield||6.79||-0.82 %||Dec 31|
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Brazil Economic News
June 24, 2020
The seasonally-adjusted consumer confidence index published by the Getulio Vargas Foundation (FGV) increased to 71.1 points in June from 62.1 points in May.
June 24, 2020
Brazil’s current account balance registered a surplus for the third consecutive month in May, swinging to a USD 1.3 billion surplus from a USD 1.4 billion deficit in the same month a year earlier.
June 18, 2020
Economic activity dropped 9.7% month-on-month in seasonally-adjusted terms in April (March: -6.2% mom) as coronavirus induced social isolation measures continued to dent activity.
Brazil: COPOM chops key interest rate to new record low in June; leaves door open for additional easing
June 17, 2020
At its 16–17 June meeting, the Central Bank of Brazil’s Monetary Policy Committee (COPOM) unanimously decided to chop the benchmark SELIC interest rate from 3.00% to a new historical low of 2.25%.
June 16, 2020
Retail sales dropped 16.8% month-on-month in seasonally-adjusted terms in April, which was a deterioration from March's 2.1% decrease.