Brazil Economic Outlook
January 18, 2022
After the economy fell into recession in Q3, conditions will have likely remained muted in the final quarter of 2021. Economic activity contracted in October amid shrinking industrial output and weak retail sales. Moreover, consumer sentiment remained deeply pessimistic in Q4, while the manufacturing PMI ended the year at its lowest level since May 2020. Elevated inflation throughout the quarter—amid supply disruptions, spiking food prices and ever-high energy costs as the worst drought in nearly a century hinders hydroelectric capacity—has precipitated a sharp tightening of interest rates, likely further impacting domestic demand. Regarding the pandemic, while Covid-19 cases have spiked in early 2022 due to the arrival of the Omicron variant, the domestic vaccination campaign has accelerated markedly in recent months, which should reduce the health and economic impact of the latest outbreak.Brazil Economic Growth
The economy is set to grow at the slowest rate in the region this year, as consumer and capital spending decelerate and export growth eases. Moreover, a fragile fiscal position, a heavy debt burden and political polarization in the run-up to October’s elections could all weigh on activity. Ongoing pandemic-related uncertainty remains a key risk to the outlook. FocusEconomics analysts see the economy expanding 0.9% in 2022, which is down 0.3 percentage points from last month’s forecast, and 1.8% in 2023.Brazil Economy Data
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Brazil Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 6.79 | -0.82 % | Dec 31 |
| Exchange Rate | 4.02 | -0.13 % | Jan 01 |
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Brazil Economic News
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Brazil: Economic activity records best reading since February in November
January 17, 2022
Economic activity rose 0.7% month-on-month in seasonally-adjusted terms in November, contrasting October’s 0.3% fall and marking the first month of growth after four consecutive periods of contraction.
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Brazil: Retail sales growth rises in November
January 14, 2022
Retail sales expanded 0.6% in month-on-month seasonally-adjusted terms in November, which was above October's 0.2% increase.
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Brazil: Inflation dips slightly in December, remains above 10%
January 11, 2022
Consumer prices increased a seasonally-adjusted 0.73% from the previous month in December, which was below the 0.95% rise seen in November but nonetheless marked the 19th month of rising prices.
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Brazil: Industrial activity contracts slightly in November
January 6, 2022
Industrial output fell 0.2% month-on-month in seasonally-adjusted terms in November (October: -0.6% mom).
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Brazil: Manufacturing PMI remains in contractionary territory in December
January 3, 2022
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) came in at 49.8 in December, matching the print from November which had marked the lowest level in 18 months.
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