Itaú BBA - Brazil Review
  • Pension reform is approved in Brazil  

    Senate approves the final vote on the pension reform; Selic rate falls to an all-time low of 5.0%

  • Moderate economic activity recovery  

    Data continue to point to a moderate pace of recovery in economic activity.

  • GDP expands 0.4% in 2Q19  

    GDP grows 0.4% in the second quarter, but this does not indicate a trend change, in our view.

  • Copom reduces the Selic rate to 6% p.a.  

    Amid weak activity, well-behaved inflation and the first vote on the pension reform in Congress, the Copom cut the Selic rate by 50 bps.

  • Copom ready to resume easing, conditional on reform  

    Central Bank’s forecasts indicate new easing cycle in 2019

  • GDP retreats 0.2% in 1Q19  

    For 2Q19, our preliminary forecast is a modest GDP growth of 0.1% qoq/sa

  • Lower House Constitution and Justice Committee sanctions pension reform  

    The next step is the discussion of the content in the Lower House’s Special Committee.

  • Government presents pension reform to Congress  

    The new pension reform proposal implies savings of 2.7% of GDP by 2027 (or BRL 1.1 trillion accumulated over 10 years).

  • Economic activity still at slow pace  

    Recent activity data point to a moderate economic performance in 4Q18.

  • Stable Selic rate becomes more likely  

    Copom keeps the Selic stable at 6.5%. Activity with weak results, but confidence advances. Bolsonaro takes office as president of the Republic

  • GDP expands 0.8% in 3Q18  

    Confidence indexes improved significantly, while previous months’ available activity data continue to show a slow recovery pace

  • Jair Bolsonaro is elected President  

    Jair Bolsonaro won the presidential election with 55% of the valid votes, while parties usually considered more traditional lost seats in the congress.

  • Waiting for economic reforms  

    Without reforms, fiscal results will begin to deteriorate again

  • Elections in the spotlight  

    Polls consolidate Bolsonaro (PSL) in the lead and Haddad (PT) ranking second in the presidential race

  • Supreme Electoral Court rejects Lula candidacy  

    The candidacy of former President Lula (PT) was rejected during the TSE session on August 31

  • “Big Center” builds alliance with PSDB  

    This coalition will have about 50% of available radio and TV campaign time

  • Ibope poll shows high percentage of blank/null and undecided voters  

    Voting intentions for the main pre-candidates declined

  • Central Bank near the end of the easing cycle  

    At its last meeting, the Central Bank of Brazil indicated that the monetary easing cycle is near its end.

  • Brazilian court rejects Lula’s appeal  

    A federal court (TRF-4) rejected former President Lula’s appeal and increased his sentence to 12 years and one month.

  • Senate approves new long-term rate  

    The Senate approved MP 777/2017, creating the long-term rate TLP to replace the TJLP.

  • New Long-Term Rate advances in Lower House  

    The next step is the voting of the base text on the Senate, possibly next week.

  • Congress approves labor reform  

    The reform changes the labor legislation in more than one hundred points, aiming to make the labor market more flexible.

  • Political uncertainty remains high  

    High political uncertainty contributes to postpone discussions about the pension reform in Congress.

  • Political events elevate uncertainties surrounding reforms  

    The latest developments led ratings agencies to change Brazil’s sovereign outlook to negative.

  • Reforms advance  

    The Social Security report was issued and included changes that diluted the reform’s.

  • Central Bank signals sharper interest rate cuts ahead  

    The monetary authority indicates the possibility of a “moderate” acceleration in the pace of monetary easing.

  • Congress debates Social Security Reform  

    The Lower House Special Committee began its analysis of the Social Security Reform and its progress will continue in March.

  • Copom frontloads the easing cycle  

    The Committee justified the acceleration based on data revealing weaker economic activity and lower-than-expected inflation.

  • Spending cap is approved and Social Security reform advances in Congress  

    The next step in the fiscal reform agenda, the Social Security reform, is successfully advancing in the Lower House.

  • Spending Cap advances in the Senate  

    In a first round of voting, the Senate approved the Constitutional Amendment Bill that sets a cap on public spending growth.

  • Lower House Approves Spending Cap  

    The Lower House approved the measure by a wide majority: 366 votes in the first round of voting and 359 in the second.

  • Congress prepares to vote on fiscal reforms  

    If approved, the measures will cause federal expenditure to decline as a percentage of GDP in the coming years.

  • Impeachment Approved, Temer Sworn in as President  

    The Senate voted in favor of impeachment, and Temer has been sworn in as Brazil’s president. 

  • Lower House Elects New Speaker  

    Maia replaces Eduardo Cunha (PMDB-RJ) as Speaker of the House, who had stepped down from the post.

  • Spending-Cap Bill Reaches Congress  

    The government has submitted its public spending-cap bill to Congress and concluded renegotiations of state debts.

  • New administration proposes fiscal reforms  

    Michel Temer’s interim administration has been sworn in and is proposing fiscal reforms to rein in public spending.

  • Lower House approves impeachment  

    The Lower House voted to approve the impeachment of President Dilma Rousseff. The motion now advances in the Senate.

  • The Lower House weighs impeachment  

    Impeachment proceedings against President Rousseff have begun.

  • Further downgrades  

    Brazil’s credit rating was again downgraded by the rating agencies

  • Volatile markets, stable interest rates  

    In a context of worsening global markets, local markets also suffered a significant decline.

  • Impeachment Process Begins, New Finance Minister Takes Office  

    The Supreme Court has set forth the rules for the impeachment process. Also, Nelson Barbosa became the new Finance Minister.

  • Political uncertainty returns  

    The government had some victories, but again it faces an uncertain environment in Congress

  • Reducing Again the Fiscal Target  

    The economy continues to struggle, with rising unemployment and inflation.

  • Fiscal Challenge in Brazil  

    Government announced new fiscal package to achieve a primary surplus target in 2016. Congressional Approval could be challenging.

  • Budget deficit proposed for 2016  

    The government submitted a budget proposal with a primary deficit which is insufficient to stabilize the public debt.

  • Fiscal Scenario Deteriorates  

    The government significantly reduced its primary surplus targets, and S&P lowered Brazil’s outlook from stable to negative.

  • Challenges Intensify  

    Key measures for the fiscal adjustment have advanced, but so have rules that increase pension spending.

  • GDP falls, fiscal adjustment moves on  

    GDP declined in the first quarter, and a sharper slide is likely in the second quarter.

  • Market improves, economy recedes  

    Markets improved with the perception that adjustments are moving forward.

  • Depreciation of the Real Sharpens  

    GDP Grows 0.3% in 4Q14 In the full year, growth stood at 0.1%

  • Declining activity and rising inflation, but fiscal adjustments advance  

    Economic activity deteriorates and points to a scenario of negative GDP growth this year.

  • Less rainfall, greater risks  

    Rainfall levels were quite weak in January, at 64% of their historical average

  • Economic Adjustments for 2015  

    The long-awaited economic adjustment has begun. The National Monetary Council raised the Long-Term Interest Rate (TJLP) by 0.50 pp, to 5.50%

  • New Economic Team Signals Adjustment  

    The government named Joaquim Levy and Nelson Barbosa to the Finance and Planning Ministries

  • Dilma Rousseff is reelected, BCB increases the Selic rate  

    In the run-off held on October 26, President Dilma Rousseff, from the PT party, was reelected with 52% of the valid votes

  • Waiting for the elections  

    Waiting for the elections

  • Marina Silva Takes the Lead in Presidential Polls  

    According to the latest Datafolha poll, Marina Silva is tied with President Dilma Rousseff in the first round, with 34%

  • Copom signals flat interest rates, activity continues to slowdown  

    The Copom signaled flat interest rates but announced stimulus to credit.

  • Lots of Goals, Little Growth  

    The economic slowdown was more intense, and the government announced measures to stimulate growth.

  • Declining Confidence, Slower GDP  

    We revised our forecast for GDP growth this year to 1.0%

  • Worrisome Inflation, Government’s approval rating continues to decline  

    The Brazilian Central Bank increased the Selic rate once again in April

  • S&P Downgrades Brazil`s Rating and Local Assets Improve in March  

    Brazil’s credit rating was downgraded by Standard & Poor's, but remains one notch above investment grade.

  • Markets Stabilize, GDP Grows 2.3% in 2013  

    The Brazilian economy in February 2014

  • Local Assets Slide as the Global Mood Deteriorates  

    The Brazilian economy in January 2014

  • Central Bank Signals an End to the Hiking Cycle and Extends Exchange-Rate Intervention  

    The Brazilian economy in December 2013

  • Lower Fiscal Effort and Progress in Infrastructure Concessions  

    A highlight was the progress in concession auctions for airports and highways, which brought in higher-than-expected financial results.

  • Gradual Recovery and Still-High Inflation  

    Positive Surprises, but Fundamentals Suggest a Gradual Economic Recovery

  • Tensions subside  

    Signs of stabilization in the economy and in the FX market.

  • Fuel for Inflation  

    We incorporated in our scenario an adjustment in fuel prices before the end of 2013.

  • Central Bank intensifies FX intervention  

    The Central Bank announced a program of daily auctions in the FX market.

  • Confidence Declines in July  

    Business and consumer confidence fell in July because of economic and political uncertainty.

  • Street Demonstrations and FX Depreciation Mark the Month  

    The real depreciated, because of higher U.S. rates, slow growth in China and domestic issues.

  • Lower GDP but Higher Interest Rates  

    The Brazilian economy grew below expectation in 1Q13 but the Central Bank accelerated the pace of interest rate hikes due to inflationary pressures.

  • Smaller primary budget surplus, higher interest rates  

    The government signaled that fiscal policy will expand further. Foreign direct investment inflows are no longer enough to finance the current account deficit.

  • High inflation leads the Central Bank to signal rate hikes, but with caution  

    Inflation remains under pressure, but some relief through tax cuts for basic food staples is likely to occur.

  • Rising Concerns about Inflation  

    The Central Bank reinforced its message against inflation, saying that the interest rate is the adequate tool to fight it.

  • New Year Challenges  

    Consumer spending dynamics are still favorable, but companies remain cautious in their investment decisions.

  • U-Turn in Exchange Rate Policy  

    The Brazilian economy proved to be harder to manage, with simultaneous concerns involving weak growth and inflation.

  • Recovery Disappoints, Real Depreciates  

    The economic recovery disappointed in the third quarter, increasing the doubts about its sustainability.

  • The rebound continues but doubts remain  

    Credit volumes are growing moderately and the Central Bank has completed the monetary easing cycle.

  • Still weak, limited growth  

    A modest recovery persists. Consumption was positive, but industrial production has not reacted so far. Inflation is trending slightly down.


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