Investment in Brazil
Brazil - Investment
Activity slows in Q1, but still beats market expectations
GDP growth lost steam in the first quarter amid a renewed rise in Covid-19 cases, slowing to 1.2% on a seasonally-adjusted quarter-on-quarter basis from 3.2% in Q4 2020. That said, the result still beat market analysts’ expectations of a 1.0% increase. On an annual basis, the economy bounced back to growth in Q1, expanding 1.0%. This contrasted the previous quarter’s 1.1% contraction and marked the best result since Q4 2019.
Q1’s softer quarterly expansion was chiefly driven by a deterioration in the domestic economy. Private consumption contracted 0.1% in seasonally-adjusted quarter-on-quarter terms in Q1, contrasting Q4’s 3.2% rise, while public expenditure dropped 0.8% (Q4 2020: +0.9% s.a. qoq). Moreover, fixed investment growth slowed notably in the quarter, dropping to 4.6% (Q4 2020: +20.0% s.a. qoq).
On the external front, exports of goods and services rebounded in Q1 amid a more favorable external backdrop, growing 3.7% (Q4 2020: -1.1% s.a. qoq) and marking the best result since Q3 2018. Conversely, growth in imports of goods and services moderated to 11.6% in Q1 (Q4 2020: +19.3% s.a. qoq).
Commenting on the outlook for the Brazilian economy, Alberto Ramos, economist at Goldman Sachs, noted:
“We expect the economy to recover visibly in coming quarters in tandem with further (gradual) progress on the Covid-19 vaccination front, gradual reopening of the economy, renewed fiscal stimulus, recovering consumer and business confidence, and very favorable terms of trade and external backdrop in general. This should, however, be mitigated by rising interest rates, high inflation, and lingering political noise and policy uncertainty.”
LatinFocus Consensus Forecast panelists see GDP expanding 3.5% in 2021, which is up 0.1 percentage points from last month’s estimate. For 2022, the panel sees the economy growing 2.5%.
Brazil - Investment Data
|Investment (annual variation in %)||-13.9||-12.1||-2.6||3.9||2.2|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||6.79||-0.82 %||Dec 31|
|Exchange Rate||4.02||-0.13 %||Jan 01|
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July 8, 2021
Consumer prices increased a seasonally-adjusted 0.53% over the previous month in June, slowing down from the 0.83% rise recorded in May.
July 2, 2021
Industrial output grew 1.4% in month-on-month seasonally-adjusted terms in May, which contrasted April's 1.5% decrease and marked the first expansion in four months.
July 1, 2021
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) climbed to 56.4 in June from May's 53.7, marking the best reading in four months.
June 28, 2021
The Getulio Vargas Foundation’s (Fundação Getúlio Vargas) industrial business confidence index rose to 107.6 in June from May's 104.2.
June 25, 2021
Brazil’s current account posted a surplus of USD 3.8 billion in May, contrasting the USD 0.5 billion deficit recorded in May last year, while narrowing somewhat from the USD 5.7 billion surplus logged in April.