Consumption in Brazil
Brazil - Consumption
Growth jumps in Q4
Recently released GDP data confirmed that the recovery shifted into a higher gear in the final quarter of 2017. GDP rose 2.1% annually in Q4, the largest expansion since Q1 2014. The result was above Q3’s 1.4% increase but was weaker than expected by market analysts. In the full year 2017, the economy grew a modest 1.0% (2016: -3.5%).
The acceleration in Q4 was driven chiefly by improved dynamics in the domestic economy. Household spending grew 2.6% annually, the best reading since Q4 2014 (Q3: +2.2% year-on-year), aided by an improving labor market and low inflation. Fixed investment grew for the first time since Q1 2014 (Q4: +3.8% yoy; Q3: -0.5% yoy). Business confidence improved notably in the quarter, although remained in pessimism territory. Although the government has made some progress on economic reforms, it remains to be seen if these gains will hold given the highly turbulent political scene and the upcoming elections. Meanwhile, government consumption fell 0.4% in Q4 (Q3: -0.6% yoy).
On the external side, soaring imports dented the external sector’s contribution. Imports grew 8.1%, notably above Q3’s 5.7% expansion, reflecting the healthier state of the domestic economy. Exports grew at a robust pace of 9.1% annually in Q4 (Q3: +7.6% yoy), thanks to firmer commodity prices and a healthy global backdrop.
On a quarter-on-quarter basis, GDP expanded a seasonally-adjusted 0.1%, below Q3’s 0.2% quarter-on-quarter rise.
All-in-all, the fourth quarter GDP release signals that the Brazilian economy is on a firm, if lackluster, recovery path. Keeping the recovery on track will require a reform-minded president, however, and it is difficult to judge if the election set for next October will yield a market-friendly outcome.
LatinFocus Consensus Forecast panelists see GDP expanding a meager 2.3% in 2018, which is unchanged from last month’s estimate. For 2019, the panel sees the economy growing 2.5%.
Brazil - Consumption Data
|Consumption (annual variation in %)||3.5||2.3||-3.9||-4.2||-|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||11.42||-0.82 %||May 21|
|Exchange Rate||3.68||-0.13 %||May 21|
|Stock Market||81,815||-0.11 %||May 21|
Get a sample report showing all the data and analysis covered in our Regional, Country and Commodities reports.
Start Your Free Trial
Start working with the reports used by the world’s major financial institutions, multinational enterprises & government agencies now. Click on the button below to get started.
May 24, 2018
Brazil’s current account balance came in at a surplus of USD 620 million in April, below the USD 1.1 billion surplus registered in April 2017 and down from March’s USD 798 million surplus.
May 23, 2018
The consumer confidence index published by the Getulio Vargas Foundation (FGV, Fundaçao Getúlio Vargas) fell a seasonally-adjusted 2.8% from the previous month in May, decreasing from 89.4 in April to 86.9, the worst print in seven months.
May 16, 2018
At its 16 May meeting, the Central Bank of Brazil’s Monetary Policy Committee (Comité de Politica Monetaria, COPOM) decided to keep the benchmark SELIC interest rate at its record low of 6.50%.
May 16, 2018
In March, economic activity fell 0.7% from the previous month in seasonally-adjusted terms, according to the Central Bank’s monthly indicator for economic activity (IBC-Br, Indice de Atividade Economica do Banco Central).
May 11, 2018
Retail sales (excluding cars and construction) rose a moderate 0.3% from the previous month in seasonally-adjusted terms in March, which contrasted February’s 0.2% decrease.