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Brazil | Economic Analysis

See here the Macro Brazil, Scenario Review and Macro Vision reports

Macro Brazil

  • Fiscal | June30, 2025

    General government gross debt rose to 76.1% of GDP in May from 76.0% of GDP in April.

  • Unemployment rate | June 27, 2025

    The data released today once again indicate a resilient labor market.

  • Credit | June 27, 2025

    Private payroll-backed loans dropped by 48%, offsetting part of the 109.3% increase recorded in April.

  • Monetary Policy Report | June 26, 2025

    The report reinforce the message from the latest policy meeting.

  • IPCA-15 | June 26, 2025

    Today’s release came close to our expectations and brought a better qualitative composition bias for the next disclosure.

  • Current Account | June 25, 2025

    We maintain the expectation of a gradual improvement in the current account balance, mainly reflecting the slowdown in domestic economic activity.

  • Copom Minutes | June 24, 2025

    We continue to expect the Selic rate to remain on hold at 15% pa until year-end, with the first easing movement only into 2026.

  • COPOM | June 18, 2025

    For now we see the Copom keeping rates unchanged at 15.00% until early 2026, when it should start a 200-bp easing cycle.

  • Copom Cockpit | June 16, 2025

    We expect the current monetary tightening cycle to come to an end, with a unanimous decision to keep the Selic rate at 14.75% pa.

  • Service sector | June 13, 2025

    The component of services provided to households was in line with our estimate, while professional, administrative, and supplementary services came in weaker than our forecast.

  • Retail sales | June 12, 2025

    Today’s numbers introduce a slightly negative bias for Q2 2025 GDP, reinforcing signs of a slowdown in economic activity.

  • May IDAT-Activity Report | June 11, 2025

    Considering data up to May, the IDAT-Activity grew by 3.6% YTD.

  • IPCA | June 10, 2025

    The core average was in line with our projection and, for the first time this year, moved closer to the range consistent with the target adjusted for seasonality.

  • IDAT-Employment and Wage | June 10, 2025

    IDAT-Employment indicates that the unemployment rate should remain at a low level in the coming months

  • Trade Balance | June 5, 2025

    The trade balance result came in below expectations, with weaker-than-expected exports in the last week of the month.

  • FX market | June 4, 2025

    The FX flow was negative in May, once again falling below the historical average after a more positive April.

  • IDAT-cars | June 3, 2025

    New and low-mileage car prices continued to decline.

  • Industrial production | June 6, 2025

    Industry is expected to remain virtually stable over the next couple of months.

  • Fiscal | May 30, 2025

    Achieving the primary result target will hinge on the government’s continued efforts to secure extraordinary revenues.

  • GDP | 1Q25

    The main negative surprise relative to our projections came from the services sector, while agriculture and industry were broadly in line with expectations.

  • Credit | May 29, 2025

    Non-earmarked and earmarked credit increase in April.

  • Unemployment rate | May 29, 2025

    The data released today once again suggest a quite resilient labor market.

  • IPCA-15 | May 27, 2025

    Despite the downward surprise, core inflation remains at a high level.

  • Current Account | May 26, 2025

    We continue to forecast a gradual improvement in the current account balance, driven by the slowdown in domestic economic activity.

  • April IDAT-Activity Report | May 19, 2025

    A contraction of 0.9% in IDAT-Goods and a slight drop of 0.1% in IDAT-Services.

  • Retail sales | May 15, 2025

    Our preliminary forecast for April suggests relative stability in the retail sector.

  • Service sector | May 14, 2025

    Today’s data reinforces our view of a strong first quarter this year.

  • Copom Minutes | May 13, 2025

    While the minutes do not close the door to an extra hike, they seem to set a high bar for such a move. We thus revised our end-of-cycle Selic rate to 14.75%.

  • IDAT-Employment and Wage | May 9, 2025

    The April IDAT-Employment still suggests a tight labor market, indicating that the unemployment rate should remain at a low level in the coming months.

  • IPCA | May 9, 2025

    April IPCA came in in line with estimates, albeit with a slightly worse-than-expected opening due to an upward surprise in underlying industrial inflation (clothing).

Brazil Scenario Review

  • Scenario | June, 2025

    Given that inflation remains above target, expectations are unanchored, and economic activity is resilient, we see no room for rate cuts in 2025.

  • Scenario | May, 2025

    We now expect the Selic rate to remain stable at 14.75% pa until the end of the year.

  • Scenario | April, 2025

    The BRL has responded primarily to international factors, particularly shifts in global risk aversion.

  • Scenario | March, 2025

    We now project the Selic rate reaching 15.25% per year (previously 15.75%) by the end of the first half of this year.

  • Scenario | February, 2025

    Despite some short-term relief, the fundamentals still point to a depreciated exchange rate.

  • Scenario | January, 2025

    Besides our usual monthly economic update, we present 10 main themes and risks for Brazil’s economic outlook in 2025.

  • Scenario | December, 2024

    Given the deterioration in inflation expectations, the weaker BRL and still-resilient activity, we expect the Selic rate to reach 15% pa.

  • Scenario | November, 2024

    Risk of non-compliance with the fiscal framework increases the need for adjustments.

  • Scenario | October, 2024

    The reduced spending restraint in the latest bimonthly report suggests a limited fiscal adjustment and contributes to the perception of rising domestic risk

  • Scenario | September, 2024

    We see the Selic at 11.75% by YE24 after a 25-bp hike in September followed by two hikes of 50 bps later this year, with a final increase of 25 bps at the first meeting of next year.

  • Scenario | August, 2024

    Main themes for 2H24.

  • Scenario | July, 2024

    To signal the sustainability of the framework's expenditure rule ahead, cost-saving initiatives are vital.

  • Scenario | June, 2024

    We have revised our forecast for the year-end 2024 Selic benchmark rate to 10.50% p.a. (from 10.25%), remaining at this level until the end of 2025.

  • Scenario | May, 2024

    We assess that the room for additional easing is now more limited and project that the Selic rate will end the year at 10.25% pa.

  • Scenario | April, 2024

    We revised our Selic rate forecast to 9.75% (from 9.25%) by yearend, with a slowdown in easing pace from June onwards.

  • Brazil Orange Book - N40 | March, 2024

    2024 appeared to start better than the previous year, but we note cautious postures regarding expected growth and upcoming tax changes ahead.

  • Scenario | March, 2024

    The evolution of the international scenario as well as worse domestic inflationary dynamics will probably curtail the decline of interest rates in Brazil.

  • Scenario | February, 2024

    We maintain our 1.8% GDP growth forecast for 2024, but with an upward bias.

  • Scenario | January, 2024

    10 themes that we consider most important for the local outlook.

  • Scenario | December, 2023

    We now see a lower terminal Selic rate, at 9.00%, and a stronger BRL in 2024, at 4.90/USD.

  • Scenario | November, 2023

    We reduced our inflation estimates to 4.6% (from 4.9%) for 2023 and to 4.0% (from 4.1%) for 2024, but external challenges and domestic uncertainties (particularly regarding the fiscal consolidation outlook) will likely prevent faster Selic rate cuts ahead.

  • Scenario | October, 2023

    We maintain our call for the Selic rate at 11.50% in YE23 and 9.0% in YE24, but the external scenario and the fiscal outlook will be key to determine the easing pace and terminal rate ahead.

  • Scenario | September, 2023

    We now expect the Selic rate to reach 11.50% p.a. by the end of 2023 and 9.00% by the end of 2024.

  • Brazil Orange Book - N39 | August, 2023

    Given the contractionary stage of the monetary policy cycle, the economy is showing a good deal of resiliency. But growth will be significantly slower in the second half.

  • Scenario | August, 2023

    We revised our GDP growth forecast in 2023 to 2.5% from 2.3%. Regarding the monetary policy, we believe the central bank will continue to cut the Selic rate at a pace of 50 bps per meeting this year, to 11.75% pa by year-end.

  • Scenario | July, 2023

    We expect the Copom to deliver a 25-bp cut in August, followed by 50-bp reductions from September onwards.

  • Scenario | June, 2023

    We revised our 2023 growth forecast to 2.3% from 1.4% due to a strong 1Q23 and the expectation that income will support consumption.

  • Scenario | May, 2023

    Highlights: we’ve increased our GDP growth forecast to 1.4% (from 1.1%) in 2023, and reduced our FX forecast to BRL 5.15/USD (from 5.30).

  • Scenario | April, 2023

    New fiscal framework establishes spending limit; the challenge is now to complement it with revenue-recovery measures

  • Scenario | March, 2023

    To reverse the worsening in inflation expectations, the commitment to low inflation and fiscal discipline must be reaffirmed.

Macro Vision

  • We estimate GDP to grow by 1.7% qoq in 1Q25

    2025/05/23 | The positive highlight should be the Agricultural sector, which, according to our estimates, expanded by 10.9% compared to 1Q24.

  • Made in China: Impact on Goods Inflation

    2025/05/14 | The redirection of Chinese exports may exert a disinflationary effect on goods in Brazil.

  • We forecast GDP growth of 0.4% qoq/sa in 4Q24

    2025/02/25 | If our estimate for 4Q24 GDP is confirmed, the GDP will end the year with an increase of 3.5%, with the service sector driving much of the rise.

  • Quality of Public Goods and Efficiency of Spending

    2025/02/25 | In this study, we show that Brazil underperforms in both quality and efficiency when compared to international benchmarks

  • What is the size of agribusiness in Brazil?

    2025/02/10 | Taking into account the primary production, processing, transport/trade and the use of resources, agribusiness equals to around 21% of GDP. In the external accounts, the sector is the key driver of Brazil’s trade surplus.

  • Foreign trade under the Trump administration

    2025/01/30 | The current context suggests downside risks outweigh upside ones, as the latter seem smaller than in 2018 and the risk of new tariffs on Brazilian exports is on the rise.

  • Interest rate cycles in Brazil

    2025/01/27 | This descriptive study analyzes 15 interest rate cycles since October 2002 to identify recurrences and patterns in monetary policy decisions.

  • The fundamental fiscal policy questions of 2025

    2025/01/23 | This report is a guide to the biggest fiscal events and debates of 2025.

  • Fiscal dominance in Brazil: Where do we stand?

    2025/01/21 | Fiscal dominance is a more continuous situation than a binary one. Recent stress and rise in risk premium suggest that we are not in full normality and reinforce the need for measures that improve fiscal perception.

  • Time to strengthen the fiscal framework

    2025/01/14 | A sustained improvement in financial conditions would only materialize with the outlook for a more balanced public debt trajectory.

  • We forecast GDP growth of 0.6% qoq/sa in 3Q24

    2024/11/28 | GDP slowed down in 3Q24 to 0.6%QoQ.

  • Freight prices to Brazil

    2024/11/05 | Freight prices in Brazil are likely to recede, in line with the movement already observed in global container prices, but these are unlikely to experience a complete normalization to the levels observed in 2023 any time soon.

  • Estimating the indirect impact on CPI

    2024/09/09 | Indirect impact of inputs on inflation.

  • We expect GDP growth of 1.0% qoq/sa in 2Q24

    2024/08/28 | Economy remained strong in 2Q24 due to higher household income, advancing 1.0% qoq/sa 2.8% yoy.

  • Online betting: Different metrics & evaluations

    2024/08/20 | Building on our study Macro Vision: Online betting, we present three possible definitions for the sector and our corresponding estimates.

  • Imports from China on the rise: relevant aspects

    2024/08/15 | In our view, the recent increase in imports underscores the need to advance with agendas aimed at improving the domestic business environment.

  • Online betting: Estimated size and impacts

    2024/08/13 | Based on the balance of payments, we estimate net spending on betting at BRL 24 billion per year.

  • Idat-Cars: The Itaú car price index

    2024/08/06 | This report presents the Itaú Car Price Index (Idat-Cars), Itau’s proprietary index of automotive prices.

  • Inflation in the horizon, simulating the BC model

    2024/07/23 | Moments of uncertainty can reduce the impact of monetary policy, making it insufficient to change inflation expectations and/or the exchange rate, resulting in higher inflation.

  • iSent: Itaú’s Central Bank sentiment classifier

    2024/07/05 | This report presents the iSent, the Itaú’s Central Bank sentiment index for Brazil and Chile, a sentiment classifier based on GPT-4.

  • Expenditure Control

    2024/06/20 | A diagnosis and proposals to control the rise in expenditures.

  • We expect 0.7% GDP growth in 1Q24

    2024/05/29 | Brazilian GDP should expand 0.7% in 1Q24. The 1Q24 GDP report will be released next Tuesday, June 4.

  • Revisiting estimates for the neutral interest rate

    2024/05/23 | Based on different methodologies, we reevaluate estimates of neutral real interest in Brazil

  • The weight of wages: A core measure that reweights

    2024/05/16 | We reweighted the IPCA according to the labor intensity of each item in order to see the impact of the tight labor market on inflation.

  • IDAT-Regional Activity: Methodology update

    2024/05/14 | Following this review, the regional version of IDAT becomes a daily indicator, broken down by state and covering online transactions, PIX, TED, DOC wire transfers and bank payment slips.

  • Court-ordered payments and the activity surprise

    2024/04/22 | Precatorios should have a positive impact on activity early this year

  • The importance of taming inflation expectations

    2024/03/25 | When it comes to deviations from the inflation target, how unanchored expectations are and for how long are both crucial.

  • Synchrony between neighbors: inflation surprises

    2024/02/27 | When a monthly consumer inflation reading in one country in the region delivers a surprise, inflation results in other countries tend to show deviation in the same direction.

  • 4Q23 GDP expected to decline 0.1% qoq/sa

    2024/02/19 | Brazilian GDP should expand 2.9% in 2023.

  • A guide to fiscal policy in Brazil in 2024

    2024/02/19 | This report is a guide to the main fiscal events and debates we anticipate for 2024.

History - Macro Brazil

History - Macro Vision