Brazil Economic Forecast

Brazil Economic Outlook

April 17, 2018

The economic recovery appears to be on track, after growth accelerated in the final quarter of 2017. Business and consumer confidence hit multi-year highs in March, and the manufacturing PMI rose further into expansionary territory in the same month. However, economic slack lingers, and the improvement is expected to be gradual. Retail sales dropped in February, and the rolling three-month unemployment rate rose as well. The focus has shifted to the October election, with the race wide open after the front-runner, former President Luiz Inácio Lula da Silva, was barred from running. Lula was jailed on 7 April after losing an appeal on a corruption conviction. The field is crowded with potential candidates, and a clearer view will emerge closer to August’s deadline for candidate nomination. The incoming president will need to focus on correcting government finances, including implanting the pension reform, to put the economy on a sounder footing and comply with the constitutionally-mandated spending cap. In a vote of confidence, on 9 April, Moody’s upgraded Brazil’s outlook from negative to stable, stating that it expects new policymakers to approve needed reforms.

Brazil Economic Growth

Growth should gain traction throughout this year thanks to moderate inflation, lower interest rates and a recovering labor market. A market-friendly outcome from October’s elections, is, however, critical to supporting the economy’s outlook. Met the why particular panelists see GDP growing 2.5% in 2018, unchanged from last month’s forecast, and 2.8% in 2019.

Brazil Economy Data

20122013201420152016
Population (million)199201-  -  -  
Population (million)199201-  -  -  
GDP per capita (USD)12,36412,278-  -  -  
GDP per capita (USD)12,36412,278-  -  -  
GDP (USD bn)2,4642,468-  -  -  
GDP (USD bn)2,4642,468-  -  -  
Economic Growth (GDP, annual variation in %)1.93.0-  -  -  
Economic Growth (GDP, annual variation in %)1.93.0-  -  -  
Domestic Demand (annual variation in %)1.93.7-  -  -  
Domestic Demand (annual variation in %)1.93.7-  -  -  
Consumption (annual variation in %)3.53.5-  -  -  
Consumption (annual variation in %)3.53.5-  -  -  
Investment (annual variation in %)0.85.8-  -  -  
Investment (annual variation in %)0.85.8-  -  -  
Industrial Production (annual variation in %)-2.32.1-  -  -  
Industrial Production (annual variation in %)-2.32.1-  -  -  
Retail Sales (annual variation in %)8.44.3-  -  -  
Retail Sales (annual variation in %)8.44.3-  -  -  
Unemployment Rate7.47.1-  -  -  
Unemployment Rate7.47.1-  -  -  
Fiscal Balance (% of GDP)-2.3-3.0-  -  -  
Fiscal Balance (% of GDP)-2.3-3.0-  -  -  
Public Debt (% of GDP)53.751.5-  -  -  
Public Debt (% of GDP)53.751.5-  -  -  
Money (annual variation in %)9.111.9-  -  -  
Money (annual variation in %)9.111.9-  -  -  
Inflation Rate (CPI, annual variation in %, eop)5.85.9-  -  -  
Inflation Rate (CPI, annual variation in %, eop)5.85.9-  -  -  
Inflation Rate (CPI, annual variation in %)5.46.2-  -  -  
Inflation Rate (CPI, annual variation in %)5.46.2-  -  -  
Inflation (PPI, annual variation in %)9.15.1-  -  -  
Inflation (PPI, annual variation in %)9.15.1-  -  -  
Policy Interest Rate (%)7.2511.00-  -  -  
Policy Interest Rate (%)7.2511.00-  -  -  
Stock Market (annual variation in %)7.4-15.5-  -  -  
Stock Market (annual variation in %)7.4-15.5-  -  -  
Exchange Rate (vs USD)2.052.36-  -  -  
Exchange Rate (vs USD)2.052.36-  -  -  
Exchange Rate (vs USD, aop)1.952.16-  -  -  
Exchange Rate (vs USD, aop)1.952.16-  -  -  
Current Account (% of GDP)-3.0-3.0-  -  -  
Current Account (% of GDP)-3.0-3.0-  -  -  
Current Account Balance (USD bn)-74.2-74.8-  -  -  
Current Account Balance (USD bn)-74.2-74.8-  -  -  
Trade Balance (USD billion)19.42.3-  -  -  
Trade Balance (USD billion)19.42.3-  -  -  
Exports (USD billion)243242-  -  -  
Exports (USD billion)243242-  -  -  
Imports (USD billion)223211-  -  -  
Imports (USD billion)223211-  -  -  
Exports (annual variation in %)-5.3-0.2-  -  -  
Exports (annual variation in %)-5.3-0.2-  -  -  
Imports (annual variation in %)-1.47.4-  -  -  
Imports (annual variation in %)-1.47.4-  -  -  
International Reserves (USD)373359-  -  -  
International Reserves (USD)373359-  -  -  
External Debt (% of GDP)13.312.7-  -  -  

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Brazil Facts

ValueChangeDate
Bond Yield9.62-0.82 %Apr 20
Bond Yield9.62-0.82 %Apr 20
Exchange Rate3.41-0.13 %Apr 20
Exchange Rate3.41-0.13 %Apr 20
Stock Market85,550-0.11 %Apr 20
Stock Market85,550-0.11 %Apr 20

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