Brazil Economic Forecast

Brazil Economic Outlook

November 6, 2018

Right-wing Jair Bolsonaro was elected president on 28 October, after a polarizing and turbulent election cycle. Bolsonaro campaigned on a largely market-friendly platform, vowing to continue with economic reforms and curb the worrysome fiscal deficit, which should bode well for the economy going forward if enacted. That said, Bolsonaro is a controversial and wildcard figure; he could thus have difficultly drumming up support in Congress to pass legislation throughout his tenure, while some uncertainty remains regarding his incoming policies. Meanwhile, mixed economic data is rolling in on the recovery. The unemployment rate fell in the third quarter and consumer confidence jumped in October, positive signs for household spending. However, industrial production contracted sharply in September and business confidence fell further the following month. Overall, growth is expected to have firmed in Q3 as the economy normalized after the truckers’ strike caused widespread disruptions in Q2.

Brazil Economic Growth

After downgrading Brazil’s outlook last month, Met the why particular panelists kept their view of 2019 growth unchanged this edition. Next year, the recovery should gain steam on the back of an improving labor market and robust fixed investment. Keeping the country’s finances on a positive trajectory is key to the country’s longer-term outlook and Bolsonaro’s pledges to pursue fiscal consolidation should keep growth on track. GDP is seen growing 2.3% in 2019 and expanding 2.5% in 2020.

Brazil Economy Data

20132014201520162017
Population (million)201203204206208
GDP per capita (USD)12,27812,1168,7858,7209,896
GDP (USD bn)2,4682,4551,7961,7972,055
Economic Growth (GDP, annual variation in %)3.00.5-3.5-3.51.0
Domestic Demand (annual variation in %)3.70.3-6.3-5.10.9
Consumption (annual variation in %)3.52.3-3.2-4.31.0
Investment (annual variation in %)5.8-4.2-13.9-11.3-1.8
Industrial Production (annual variation in %)2.1-3.0-8.3-6.42.5
Retail Sales (annual variation in %)4.32.2-4.4-6.32.1
Unemployment Rate7.16.88.511.512.7
Fiscal Balance (% of GDP)-3.0-6.0-11.2-9.0-7.8
Public Debt (% of GDP)51.556.365.570.074.0
Money (annual variation in %)11.99.96.33.84.8
Inflation Rate (CPI, annual variation in %, eop)5.96.411.76.32.9
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 (%)11.0011.7514.2513.757.00
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)-3.0-4.2-3.3-1.3-0.5
Current Account Balance (USD bn)-74.8-114.2-59.4-23.5-9.8
Trade Balance (USD billion)2.3-4.019.747.767.1
Exports (USD billion)242225191185218
Imports (USD billion)211229171138151
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)12.714.418.618.015.1

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Brazil Facts

ValueChangeDate
Bond Yield11.45-0.82 %Nov 14
Exchange Rate3.78-0.13 %Nov 15
Stock Market85,973-0.11 %Nov 14

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