Brazil Economic Forecast

Brazil Economic Outlook

September 10, 2019

The economy rebounded solidly in the second quarter, with growth exceeding expectations. The upturn was spearheaded by a pick-up in investment amid loose monetary policy and improved industrial activity. In addition, exports improved although still remained weak overall due to evaporated demand from Argentina and a subdued external backdrop. Incoming data for the third quarter has been mixed so far, suggesting that the acceleration may have been short-lived: While consumer and business sentiment rose in August, industrial production contracted again in July and the current account recorded the largest deficit since 2015 in the same month. On the political front, the crucial pension reform cleared another hurdle after gaining a Senate committee’s approval on 4 September. The committee also voted to make some minor amendments in another bill, which could boost savings for local governments.

Brazil Economic Growth

Economic growth is expected to remain in the doldrums this year as collapsed demand from Argentina, slowing growth in China, global trade tensions and problems in the mining sector combine to hamper export growth and investment. That said, lower interest rates should provide a boost to momentum, while faster-than-expected passing of reforms could help rejuvenate confidence. FocusEconomics analysts project growth of 1.0% this year, which is unchanged from last month’s forecast, and 2.1% in 2020.

Brazil Economy Data

20132014201520162017
Population (million)200202203205207
GDP per capita (USD)12,34212,1708,8278,7719,929
GDP (USD bn)2,4682,4551,7961,8002,053
Economic Growth (GDP, annual variation in %)3.00.5-3.5-3.31.1
Domestic Demand (annual variation in %)3.70.3-6.3-4.81.0
Consumption (annual variation in %)3.52.3-3.2-3.91.4
Investment (annual variation in %)5.8-4.2-13.9-12.1-2.5
Industrial Production (annual variation in %)2.1-3.0-8.2-6.42.5
Retail Sales (annual variation in %)4.32.2-4.4-6.32.1
Unemployment Rate7.16.88.511.512.7
Fiscal Balance (% of GDP)-3.0-6.0-10.2-9.0-7.8
Public Debt (% of GDP)51.556.365.569.974.1
Money (annual variation in %)10.710.16.84.85.5
Inflation Rate (CPI, annual variation in %, eop)5.96.410.76.32.9
Inflation Rate (CPI, annual variation in %)6.26.39.08.73.4
Inflation (PPI, annual variation in %)5.12.211.37.7-2.5
Policy Interest Rate (%)10.0011.7514.2513.757.00
Stock Market (annual variation in %)-15.5-2.9-13.338.926.9
Exchange Rate (vs USD)2.362.663.963.253.31
Exchange Rate (vs USD, aop)2.162.353.343.483.19
Current Account (% of GDP)-3.2-4.1-3.0-1.3-0.4
Current Account Balance (USD bn)-79.8-101.4-54.5-24.0-7.2
Trade Balance (USD billion)2.3-4.019.747.767.1
Exports (USD billion)242225191185218
Imports (USD billion)240229171138151
Exports (annual variation in %)-0.2-7.0-15.1-3.117.6
Imports (annual variation in %)7.4-4.4-25.2-19.89.6
International Reserves (USD)359364356365374
External Debt (% of GDP)12.714.418.618.115.5

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Brazil Facts

ValueChangeDate
Bond Yield7.30-0.82 %Sep 04
Exchange Rate4.10-0.13 %Sep 04
Stock Market101,201-0.40 %Sep 04

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