Itaú BBA - Waiting for 2020

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Waiting for 2020

July 17, 2019

Will the pension reform really trigger a growth rebound? The feedback from the real sector is mixed and depends on the business segment

For the version with all texts, please open the attached pdf file

 

With information through July 16, 2019

This report summarizes anecdotal information on current economic conditions received from key contacts, economists, market experts and other sources outside Itaú. Apart from the 'our view' section, it does not necessarily reflect views of Itaú's Macroeconomic Research team.

Contents:

Consumption and production of goods and services
The downward trend seen in the beginning of the year extended into the second quarter, with incipient signs of improvement in some sectors only in June.

Real estate
The trend of gradual improvement has continued. São Paulo is the main positive highlight, while Rio de Janeiro still struggles.

Agricultural sector
The African swine fever in China is pushing protein prices across the board, while the frustration with crops in the U.S. brings some relief to grain producers.

Labor market
Companies believe that efficiency lessons taught by the crisis will result in lower demand for workers ahead.

Investment
Still on a wait-and-see mode.

Special comment: Will the pension reform really trigger a growth rebound?

Our View
The reform is a first step for a gradual recovery, with interest rate cuts and higher confidence levels that will, little by little, translate into stronger consumption and investment. We see efforts towards simplifying business and increasing the predictability when investing as the main goals to be pursued ahead.


 

For the version with all texts, please open the attached pdf file



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