Itaú BBA - Quarterly Inflation Report: new scenario revision

Macro Brazil

< Volver

Quarterly Inflation Report: new scenario revision

junio 25, 2020

The QIR shows forecasts that are consistent, in our view, with the maintenance of the Selic rate at a low level for a prolonged period.


For the version with all charts and tables, please open the attached pdf file
 

 The June 2020 inflation report shows forecasts that are consistent, in our view, with the maintenance of the benchmark interest rate at a low level for a prolonged period, with an eventual increase only in 2021.

 The report also shows that, in relation to the Copom´s previous expectations, the inflation data from March to May accumulated a 100-bp downward surprise. Additionally, the GDP growth forecast was revised to  -6.4% in 2020, which is worse than our own forecast (-4.5%).

 Regarding the studies presented, given the current scenario, the highlight goes to the box on high-frequency indicators associated with the economic activity during the pandemic, which show that a recovery has begun already in April, albeit only gradually. The monthly evolution of labor market data (instead of quarterly averages, according to the PNAD) also aims to increase the accuracy of the analysis at the margin, showing that the unemployment rate reached higher levels in April, with relevant drop of labor force and, hence, the real wage bill. In another interesting box, the BCB assesses the credit market during the pandemic, showing that the volume of loans increased during this period, including for micro and small companies. Finally, we highlight the boxes regarding inflation components and measures, with alternative scenarios, studies on gasoline prices, outlook for electricity tariffs and changes to the set of core measures the BCB will use, from now on, to evaluate the economic scenario.


For the version with all charts and tables, please open the attached pdf file



< Volver