Brazil | Economic Analysis
See here the Macro Brazil, Scenario Review and Macro Vision reports
Macro Brazil
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Retail sales | November 13, 2025
Weaker retail sales results conclude the third-quarter data cycle confirming the deceleration in economic activity.
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Service sector | November 12, 2025
Service sector advanced at the margin, but the GDP-relevant components were weaker, reinforcing our view of a slowdown in economic activity.
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October IDAT-Activity Report | November 11, 2025
Retreat of 0.3% in October. The result reflects a decline in services and a slight increase in goods.
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IPCA | November 11, 2025
October IPCA maintained a benign qualitative composition, with better-than-expected reading.
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Copom Minutes | November 11, 2025
The minutes point to a confident committee, and one that sees less upside risks to the output gap, and hence inflation, than was the case in October.
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IDAT-Employment and Wage | November 10, 2025
The unemployment rate should remain at historically low levels through the end of the year, with a slight increase expected in the coming months.
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Trade Balance | November 6, 2025
The trade balance improved at the margin in October, reflecting stronger exports.
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COPOM | November 5, 2025
The Copom delivered the expected decision, leaving the Selic rate unchanged at 15.00%, where it has been since June.
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IDAT-cars | November 5, 2025
Prices for new and low-mileage cars decreased, while prices for used cars rose slightly.
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FX market | November 5, 2025
October’s result was positive, reflecting robust inflows in the trade account and moderate outflows in the financial segment.
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Industrial production | November 4, 2025
The industry ended the third quarter broadly flat, and this loss of momentum is likely to persist in the coming months.
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Copom Cockpit | October 31, 2025
We believe that the Copom will not change its signaling of maintaining interest rates at 15% pa for a prolonged period.
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Fiscal | October 31, 2025
Revenues continue to decelerate, in line with overall economic activity, while expenditures are accelerating in the second half of the year.
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Unemployment rate | October 31, 2025
Unemployment rises, and data point to incipient signs of a loss of momentum in the labor market.
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Credit | October 29, 2025
The annual pace of outstanding credit growth slowed in September.
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IPCA-15 | October 24, 2025
For 2025, we expect the IPCA to increase 4.6%.
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Current Account | October 24, 2025
The deterioration in the current account at the margin reflects a wider income account deficit, as well as a smaller trade surplus.
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Retail sales | October 15, 2025
As the positive surprise was concentrated in 'Wholesale Specialized in Foods', a category not included in our GDP tracking, our tracking remains stable at +0.3% qoq and +1.8% yoy.
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Service sector | October 14, 2025
The data showed the service sector broadly flat once again in the third quarter.
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September IDAT-Activity Report | October 13, 2025
The result reflects decreased in both services and goods.
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IPCA | October 9, 2025
The release adds a downward bias to our inflation forecast for the year.
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FX market | October 8, 2025
September’s FX flow close to the historical average for the month, with highlight on the weakening of trade flows.
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IDAT-cars | October 7, 2025
Prices for low-mileage and used cars decreased, while prices for new cars remained stable.
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Trade Balance | October 6, 2025
Imports accelerated at the margin and remain at a historically high level.
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IDAT-Employment and Wage | October 6, 2025
These figures reinforce our expectation of a slight increase in the unemployment rate by year-end.
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Industrial production | October 3, 2025
Despite the positive surprise, industry continues to lose momentum in Q3, and this trend is likely to persist in the coming months.
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Fiscal | September 30, 2025
The success of the government’s proposed fiscal adjustment strategy will depend on the confirmation of extraordinary revenues and the approval of measures in Congress.
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Unemployment rate | September 30, 2025
August’s unemployment rate stability was driven by a lower participation rate, as both formal and informal employment contracted during the month.
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Credit | September 29, 2025
The system’s delinquency rate, seasonally adjusted, rose by 0.2 percentage points to 3.9%.
Brazil Scenario Review
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Scenario | November, 2025
We maintain our forecast for the start of the easing cycle in January next year, taking the Selic rate to 12.75% p.a. in 2026.
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Scenario | October, 2025
We maintain our projection for the start of the easing cycle in 1Q26, taking the Selic rate to 12.75% p.a. in 2026
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Scenario | September, 2025
The weak dollar trend should allow the BRL to trade at more appreciated levels in the short term.
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Scenario | August, 2025
Amid a weaker USD globally and higher interest rates in Brazil, we changed our FX forecasts to BRL 5.50/USD for 2025 and 2026, from 5.65.
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Scenario | July, 2025
The tariffs announced by the U.S. should hinder the improvement of the BRL observed in the year.
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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.
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Scenario | May, 2025
We now expect the Selic rate to remain stable at 14.75% pa until the end of the year.
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Scenario | April, 2025
The BRL has responded primarily to international factors, particularly shifts in global risk aversion.
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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.
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Scenario | February, 2025
Despite some short-term relief, the fundamentals still point to a depreciated exchange rate.
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Scenario | January, 2025
Besides our usual monthly economic update, we present 10 main themes and risks for Brazil’s economic outlook in 2025.
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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.
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Scenario | November, 2024
Risk of non-compliance with the fiscal framework increases the need for adjustments.
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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
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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.
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Scenario | August, 2024
Main themes for 2H24.
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Scenario | July, 2024
To signal the sustainability of the framework's expenditure rule ahead, cost-saving initiatives are vital.
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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.
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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.
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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.
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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.
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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.
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Scenario | February, 2024
We maintain our 1.8% GDP growth forecast for 2024, but with an upward bias.
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Scenario | January, 2024
10 themes that we consider most important for the local outlook.
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Scenario | December, 2023
We now see a lower terminal Selic rate, at 9.00%, and a stronger BRL in 2024, at 4.90/USD.
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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.
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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.
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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.
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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.
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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.
Macro Vision
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Court-ordered debt payments mitigate the slowdown
2025/10/02 | We project a contribution of around 0.2 pp. to GDP in 3Q25, in line with our expectation of growth of +0.3%q/q (1.9%y/y).
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NAIRU slightly lower; inflation still resilient
2025/09/24 | We estimate the NAIRU to be around 8%, consistent with a tight labor market and persistent inflationary pressures.
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States and Municipalities Impulses and Risks
2025/09/24 | Subnational fiscal impulse in elections years is 0.2 p.p. of GDP above the historical average.
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We estimate GDP to grow by 0.2% qoq in 2Q25
2025/08/29 | The 2Q25 GDP will be released on Tuesday, September 2nd.
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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.
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Made in China: Impact on Goods Inflation
2025/05/14 | The redirection of Chinese exports may exert a disinflationary effect on goods in Brazil.
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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.
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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
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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.
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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.
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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.
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The fundamental fiscal policy questions of 2025
2025/01/23 | This report is a guide to the biggest fiscal events and debates of 2025.
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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.
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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.
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We forecast GDP growth of 0.6% qoq/sa in 3Q24
2024/11/28 | GDP slowed down in 3Q24 to 0.6%QoQ.
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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.
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Estimating the indirect impact on CPI
2024/09/09 | Indirect impact of inputs on inflation.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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Expenditure Control
2024/06/20 | A diagnosis and proposals to control the rise in expenditures.
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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.
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Revisiting estimates for the neutral interest rate
2024/05/23 | Based on different methodologies, we reevaluate estimates of neutral real interest in Brazil
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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.
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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.
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Court-ordered payments and the activity surprise
2024/04/22 | Precatorios should have a positive impact on activity early this year
History - Macro Brazil
Current Account | September 26, 2025
August current account deficit came in better than expected, with higher outflows in profits and dividends more than offset by smaller outflows in interest and services.
Monetary Policy Report | September 25, 2025
The BCB revised its assumptions for the output gap, bringing them closer to our expectations for GDP trajectory over the coming quarters.
Despite some downside surprises in more volatile prices, underlying services measures remain pressured.
Copom Minutes | September 23, 2025
We continue to expect the easing cycle to begin in January 2026.
If anything, the meeting statement has a somewhat hawkish bias, in that its inflation forecast for the relevant policy horizon (1Q27) stands at 3.4%
Unemployment rate | September 16, 2025
This release introduces a downside bias to our year-end unemployment rate projection, currently at 6.4%.
August IDAT-Activity Report | September 15, 2025
Expanded by 1.2% in August.
Copom Cockpit | September 15, 2025
We believe that the committee seems increasingly confident that the economy is slowing and therefore sees no need to adjust its policy outlook at this point.
Service sector | September 12, 2025
GDP-relevant components surprised to the downside, reinforcing our view of a gradual deceleration in economic activity throughout 3Q25.
Retail sales | September 11, 2025
Broad retail sales below expectations and our forecast reinforce our view of a deceleration in economic activity throughout 3Q25.
IDAT-Employment and Wage | September 8, 2025
These figures reinforce our expectation that the labor market will remain tight through year-end, with wage dynamics supporting household consumption.
Trade Balance | September 4, 2025
Today’s result reinforces our projection of a US$65 billion surplus by year-end.
We do not anticipate a meaningful shift in this flow trend in the near term.
Industrial production | September 3, 2025
Industrial production receded 0.2% mom/sa in July.
Prices for low-mileage cars increased, while prices for new and used cars remained stable.
Current Account | August 26, 2025
Today’s data suggest a bias toward an even wider current account deficit than 3% of GDP in 2025.
Today’s release does not change our baseline scenario - we continue to expect inflation at 5.1% for the year.
Service sector | August 14, 2025
Despite the positive headline surprise, most components declined at the margin, reinforcing our view of a slowdown in economic activity during the second quarter of 2025.
Broad Retail Sales fell 1.7% qoq s.a. in 2Q25.
July IDAT-Activity Report | August 12, 2025
The result reflects a 1.5% decline in IDAT-Services and a 1.6% drop in IDAT-Goods.
Today’s data came in better than expected, both in the headline and in the qualitative components.
IDAT-Employment and Wage | August 11, 2025
Despite the slowdown, the indicator still suggests that the unemployment rate should remain at historically low levels in the coming months, with no signs of a turning point.
Trade Balance | August 6, 2025
There was an acceleration in exports of certain products to the United States, such as iron/steel and aircraft, suggesting some anticipation of the tariff hikes that took effect in August.
In July, there was a significant increase in inflows in the commercial segment, but the financial sector continued to record large outflows.
Prices for new and used cars increased, while low-mileage vehicles declined.
Copom Minutes | August 5, 2025
We continue to project the Copom to leave the Selic unchanged at 15% until year-end, and to begin a modest easing cycle by 1Q26.
Industrial production | August 1, 2025
Industrial production increased 0.1% qoq s.a. in 2Q25.
Primary deficit of BRL47.1bn in June
Unemployment rate | July 31, 2025
Unemployment rate fell to 5.8% s.a. in June
The Copom decided, as anticipated, to leave the policy rate unchanged at 15% pa, where it should stay for quite some time.
Corporate loans receded 7.2%, impacted by the increase in the Tax on Financial Operations.
We expect the Copom to unanimously maintain the Selic rate at 15.00%, reinforcing the strategy of maintaining it at a contractionary level for a prolonged period.
Current Account | July 25, 2025
Profits and dividends lead the negative surprise in the current account in June.
Underlying services inflation came in above expectations, led by food away from home.
Service sector | July 11, 2025
Today’s data reinforces our view of a slowdown in economic activity during the second quarter.
IPCA moved up 0.24% in June.
There was a slowdown in trade inflows (driven by weaker export flows and stronger import flows), while financial outflows remained strong.
June IDAT-Activity Report | July 8, 2025
This result reflected a 1.4% drop in the IDAT-Services index, while the IDAT-Goods index remained stable during the period.
Today’s figures reinforce signs of a slowdown in economic activity.
We continue to expect the trade balance to recover ahead with the slowdown in domestic activity in the second half of this year.
IDAT-Employment and Wage | July 4, 2025
June IDAT-Employment shows, once again, resilience in formal employment.
New car prices rebounded, reversing the previous month decline.
Industrial production | July 7, 2025
Industry appears to be losing momentum in the second quarter, and this trend is likely to persist in the coming months.
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.
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.
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.
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.
For now we see the Copom keeping rates unchanged at 15.00% until early 2026, when it should start a 200-bp easing cycle.
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.
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.
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.
The trade balance result came in below expectations, with weaker-than-expected exports in the last week of the month.
The FX flow was negative in May, once again falling below the historical average after a more positive April.
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.
The main negative surprise relative to our projections came from the services sector, while agriculture and industry were broadly in line with expectations.
Achieving the primary result target will hinge on the government’s continued efforts to secure extraordinary revenues.
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.
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.
Our preliminary forecast for April suggests relative stability in the retail sector.
Today’s data reinforces our view of a strong first quarter this year.
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.
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).
The Copom delivered the expected (by us and most of the market) decision, a 50-bp hike, taking the policy rate to 14.75%.
We expect the trade balance to further expand given the expectation of a record harvest and the economic activity slowdown.
April’s FX flow returned to positive territory after five consecutive months of net outflows.
Industrial production | May 7, 2025
We expect the economy to slow down from now on, with greater intensity in the second half of the year.
New car, low-mileage and used car prices declined.
Following the signaling of an additional and smaller increase from the last meeting, we expect a 50-bp increase in the Selic rate, to 14.75% pa.
The delinquency rate, with seasonal adjustment, remained broadly stable at 3.2%.
We consider it important for the government to announce a freeze on discretionary spending of some R$ 40 billion in May bi-monthly report.
Unemployment rate | April 30, 2025
The unemployment rate declined to 6.4%, with a decrease in the informal employment, which was offset by a rise in employment in the formal sector.
Current Account | March 26, 2025
We continue to forecast more moderate deficits, in line with a recovery in the trade balance.
The highlight of this reading was the upside surprise in core industrials, concentrated on personal hygiene (perfume) and food at home.
IDAT-Employment and Wage | March 11, 2025
The March IDAT-Employment still suggests that the unemployment rate will remain at a low level in the coming months.
Service sector | April 10, 2025
Today's data reinforces our scenario of a strong first quarter this year.
The indicator for non-earmarked loans increased by 0.1 p.p. for both non-financial corporations and households, reaching 3.0% and 5.7%, respectively.
March IDAT-Activity Report | April 9, 2025
An increase of 1.4% in IDAT-Goods and a slight drop of 0.4% in IDAT-Services.
Year-to-date, the trade flow was negative by US$ 15.5 bn, versus +US$ 4.8 bn in the same period from last year.
As expected, sales of credit-sensitive goods weakened, while sales of income-sensitive goods increased.
We expect the trade balance to continue improving with the record harvest and slowdown in economic activity ahead.
Industrial production | April 2, 2025
Industrial production receded 0.1% mom/sa in February.
New car and used prices increased, while low-mileage car prices declined.
We do not expect the government to meet the primary result target this year, even with the ongoing efforts in the revenue agenda.
Unemployment rate | March 28, 2025
Unemployment rate declined to 6.5% s.a. in February.
Quarterly Inflation Report | March, 2025
Hawkish forecasts, but a dovish take on activity.
The downside surprise was concentrated in industrials, suggesting that the pass-through of the exchange rate depreciation may be less intense than we expected.
Current Account | March 26, 2025
Current account records an outflow of 3.3% of GDP in February
Copom Minutes | March 25, 2025
We maintain our call that the Copom will implement two further hikes, to end the cycle with the Selic rate at 15.25% pa.
We expect the Copom to deliver two additional hikes in its next meetings, taking the Selic to its resting level of 15.25% by mid-year.
Copom Cockpit | March 17, 2025
The Copom will likely increase the Selic rate to 14.25% per year, in a unanimous vote, delivering the second of two additional 100-bp moves that were signaled at the end of last year, and signal at least one further adjustment, albeit of a smaller magnitude, at the May meeting.
Looking ahead, based on our IDAT-Activity data, we expect both the retail and services sectors to accelerate in February.
Seasonally adjusted delinquency rate rose 0.2 p.p. to 3.2%.
Service sector | March 13, 2025
We expect an acceleration in the service sector in February.
February IDAT-Activity Report | March 12, 2025
Within IDAT-Services, only beauty services and other personal services segments declined.
Despite the slightly-better-than-expected breakdown, mainly for industrials, underlying services remained under pressure.
Industrial production | March 11, 2025
Although the industry remained stable, the manufacturing sector rose 1.0% mom/sa, suggesting a recovery of economic activity.
IDAT-Employment and Wage | March 11, 2025
Wages increased sharply in February, boosted by extraordinary payments such as profit-sharing and performance bonuses, etc.
New car and used prices increased, while low-mileage car prices declined.
March 7, 2025 | The 4Q24 GDP came in below our expectations, with some deceleration in the services and industrial sectors and a negative contribution from the agricultural sector.
Weak result for the month, but we expect the trade balance to improve throughout the year as grain exports gain traction.
The February’s improvement was driven exclusively by the trade flow, which accelerated again throughout the month with the advancement of the grain harvest.
The consolidated public sector registered a primary surplus of BRL 104.1 bn in January, a lower-than-expected result vs our BRL 112.0 bn surplus call.
Current Account | February 27, 2025
The current account remains under pressure, with the trade balance still weak and high services and income deficits.
Even with today's data below expectations, the result continue to indicate a poor breakdown for inflation.
Retail sales | February 13, 2025
Retail sales sensitive to credit showed a stronger slowdown in the last two months.
Service sector | February 12, 2025
Today's data supports our view that economic activity slowed down in the 4th quarter.
January IDAT-Activity Report | February 11, 2025
Within IDAT-Services, the decline was led by the food sector (-1.0%).
January’s IPCA came in line with our estimate confirms our expectation of some deceleration in underlying services at the margin.
Trade Balance | February 7, 2025
As a result, the trade balance accumulates a surplus of US$70.5 bn in 12 months.
IDAT-Employment and Wage | February 7, 2025
IDAT-Employment and Wage shows resilience in formal employment an increase in wages in January.
The result represents the largest outflow recorded for the period since the beginning of the historical series released by the Central Bank.
Industrial production | February 5, 2025
Despite the positive surprise, the industry remained virtually stable in the 4Q24, reflecting a slowdown in economic activity.
New car prices significantly increased.
Copom Minutes | January 4, 2025
For now, we envisage, after the 100-bp move set for March, two more hikes, at a 75-bp pace, to end the cycle at 15.75% pa.
The federal government reached the lower limit of the primary result target in 2024, after deducting expenses from the actual result.
Unemployment rate | January 31, 2025
The unemployment rate increased more than we expected; however, the breakdown still indicates a resilient labor market.
We envisage another 100-bp hike in the next policy meeting (on March 18-19th), and a terminal rate at 15.75% pa, but risks seem to be that the Copom may stop short.
The seasonally adjusted general delinquency rate remained practically stable at 3.1%.
Copom Cockpit | January 27, 2025
We expect a unanimous decision to increase the Selic benchmark rate to 13.25% pa, marking the first of two additional 100-bp hikes that were signaled at the end of last year.
Current Account | January 24, 2025
Despite a smaller-than-expected deficit in December, the current account remains under pressure when compared to the recent years average.
Despite the relatively low monthly print (dragged by electricity prices due to the Itaipu bonus), the IPCA-15 came in above expectations in January and with a worse-than-expected breakdown.
Service sector | January 15, 2025
Today's data supports our view that economic activity is decelerating in the 4Q24.
The index ended up above the upper limit of the inflation target, at 4.5%.
Retail sales | January 9, 2025
Today's data corroborate our view of a slowdown in activity in the last quarter of last year.
December posted the largest financial outflow in the historical series.
Industrial production | January 8, 2025
With today´s release, the carry-over of industrial production for 4Q24 now stands at 0.1%, with the following breakdown: 0.4% for manufacturing and -0.8% for mining/extractive.
December IDAT-Activity Report | January 7, 2025
Decline in services and goods.
IDAT-Employment and Wage | January 7, 2025
Wages in the 3-month average fell for the second consecutive print in December, reaching a level close to the accumulated inflation over the last 12 months.
Although December’s pace was lower than the previous months, it still advanced by +0.1% MoM.
Trade Balance | January 6, 2025
In the coming months, we expect the trade balance to gain momentum again with a seasonal improvement in exports and a continued slowdown in imports.
Lower limit of this year's primary result target may be achieved due to strong revenue collection, but fiscal risks will remain high ahead.
New loans fell by 1.1% for non-financial corporations, and by 3.6% for households.
Despite the downside surprise, the qualitative result continued to worsen at the margin (more than expected), with acceleration in underlying services.
Unemployment rate | December 27, 2024
Real wages increased by 0.3 p.p., reflecting the dynamism of the labor market.
Current Account | December 23, 2024
External financing is at a less favorable level and has worsened at the margin, with FDI not fully covering the current account deficit.
Quarterly Inflation Report | December, 2024
The IR reinforces the signaling already given at the last Copom meeting that the interest rate hike movement should keep advancing significantly.
Copom Minutes | December 17, 2024
The text basically cements the next two policy decisions, 100-bp hikes, outside a major (unlikely) improvement in the inflationary environment.
Retail sales | December 12, 2024
Today's data corroborate our expectation of a resilient activity in the last quarter of this year.
The statement indicated that, unless the scenario changes, the committee intends to hike the Selic by 100 bps twice more.
Service sector | December 11, 2024
The services sector posted strong growth in October, supporting our view that economic activity will remain robust in the 4th quarter.
November IDAT-Activity Report | December 10, 2024
Services advanced at the margin, while goods were broadly flat.
November’s IPCA was in line with our expectations, but with a worse than expected composition.
Copom Cockpit | December 9, 2024
The current scenario is concerning, requiring a more vigorous stance by the monetary authority.
Trade Balance | December 5, 2024
The trade balance accumulates a surplus of US$79.2 bn in 12 months.
Financial sector continues with high outflows compared to previous years.
IDAT-Employment and Wage | December 4, 2024
IDAT-Employment showed some accommodation in formal employment with a slowdown in growth at the margin.
For the full year, there is an upward bias to our current 3.2% estimate.
Prices across all segments increased.
In our view, the recently announced government fiscal package fell short of expectations and may be insufficient to ensure compliance with the framework until 2026.
Unemployment rate | November 29, 2024
Real wages increased 0.5% mom/sa, after a slight decline in September.
In October, non-earmarked loans increased 1.2% in real terms and seasonally adjusted.
As in the last readings, the qualitative aspect of inflation continued to worsen at the margin, with an acceleration in underlying services.
Current Account | November 25, 2024
Despite the positive surprise, the balance of payments data for October continued to indicate deterioration of the current account.
Service sector | November 13, 2024
Despite the upside surprise, today's data does not change our expectation of a slowdown in activity in the 3Q24.
October IDAT-Activity Report | November 12, 2024
Retreat in IDAT-Goods (-0.9% mom/sa) and in IDAT-Services (-0.9% mom/sa).
Retail sales | November 12, 2024
Retail sales close to our projection, but weaker than expected by the market.
Copom Minutes | November 11, 2024
Economic conditions and inflation expectations – which depend on important fiscal decisions ahead – may require an acceleration of pace soon.
Primary deficit of BRL 7.3 bn in September, better than expectations.
With the qualitative aspect worsening at the margin, IPCA rose 0.56% in October.
IDAT-Employment and Wage | November 7, 2024
Formal employment resilience indicates that the unemployment rate will likely remain at historically low levels in the coming months.
In a unanimous decision, the Copom delivered a 50-bp hike, as widely expected, taking the Selic rate to 11.25% pa.
Trade Balance | November 6, 2024
Exports totaled US$29.4 bn and imports totaled US$25.1 bn.
In the year to date, the total flow totaled US$ 9.7 billion, below the US$ 24.2 billion recorded in the same period last year.
Prices of low-mileage cars decreased.
Copom Cockpit | November 1, 2024
We expect the committee to accelerate the adjustment pace to 50 bps (from 25 bps in the previous meeting), taking the Selic benchmark interest rate to 11.25% pa.
Industrial production | November 1, 2024
With highlight to the manufacturing industry, Industrial production moved in 3Q24.
Unemployment rate | October 31, 2024
The data released today continued, once again, to indicate a tight labor market.
Household delinquency in non-earmarked loans has the second consecutive increase and drives the system's overall delinquency.
Current Account | October 29, 2024
The balance of payments data for September continued to show pressure on the current account, with the trade surplus weakening further and a higher outflow of profits and dividends in the month.
Unlike the last few readings, the breakdown of inflation was worse at the margin, with an acceleration of underlying services.
Service sector | October 11, 2024
The August’s service revenue result underscores our view of some slowdown in activity in Q3.
September IDAT-Activity Report | October 11, 2024
Activity rose 0.9% mom/sa in September.
Retail sales | October 10, 2024
Retail data corroborates an economic slowdown in 3rd quarter of the year.
The foreign exchange flow remained negative in September, as financial outflows continued at a high level, while commercial inflows kept up the downward trend of recent months.
September IPCA came in slightly below our expectations and continued to show a positive opening, especially due to some downward surprises in underlying industrials.
IDAT-Employment and Wage | October 7, 2024
IDAT-Employment continued to indicate resilience of formal employment, with a small acceleration at the margin, underscoring our expectation that the unemployment rate will remain at historically low levels in the coming months.
Prices for all vehicle breakdowns increased, with new cars being the positive highlight of the month.
Trade Balance | October 4, 2024
The trade balance’s result was positive in September, with exports accelerating by more than expected.
Industrial production | October 2, 2024
August reading was in line with our expectations and showed the industry practically stable at the margin, with a slight decline in manufacturing.
Tax collection has been stronger, but fiscal risks remain high.
Unemployment rate | September 27, 2024
Real wages rose again, following a small decline in July.
Quarterly Inflation Report | September, 2024
In our view, the scenario presented in the IR reinforces the view that the tightening cycle will likely extend over the next few months, towards our Selic rate estimate of 12% p.a.
September IPCA-15 came in well below our expectations and with a more benign breakdown.
Current Account | September 25, 2024
External financing remains at a historically comfortable level, with FDI more than fully covering the current account deficit.
Copom Minutes | September 24, 2024
The general message did not diverge from last week´s statement. We continue to expect the next move to be a 50-bp hike.
We reckon the statement indicates that the next move will be a 50-bp hike, unless the scenario improves materially.
Copom Cockpit | September 12, 2024
The Copom will meet again, after weeks of intense volatility and with fundamentals that justify the beginning of an interest rate tightening cycle, starting with a pace of 25 bps.
Retail sales | September 12, 2024
After the upward surprise in the services sector released yesterday, today's retail data goes in the opposite direction, not indicating a further acceleration of the economy.
Service sector | September 11, 2024
The service sector surprised upwards again in July, suggesting that activity is still resilient at the beginning of the third quarter.
IDAT-cars | September 10, 2024
Breaking it down by vehicle categories (new cars, low mileage and used cars), the index changed +0.1% MoM.
Inflation in August came in below our expectations and with a better-than-expected breakdown, especially due to the downward surprise in underlying services.
IDAT-Employment and Wage | September 9, 2024
IDAT-Employment for August continued to indicate resilience of formal employment.
Trade Balance | September 5, 2024
After losing momentum at the beginning of this year, the trade balance seems to have stabilized at a level that is still historically high.
Industrial production | September 4, 2024
Despite the upside surprise, we project some slowdown in economic activity throughout the 2nd half of the year.
We anticipate GDP growth of 2.5% in 2024, considering a slowdown of economic activity during the second half of the year, but with an upward bias.
General government gross debt rose to 78.5% in July from 77.8% of GDP in June.
Unemployment rate | August 30, 2024
The fall in the unemployment rate was the result of a reduction in the participation rate, while employment (formal and informal) remained stable.
In July, non-earmarked loans increased 1.2% in real terms and seasonally adjusted compared to the previous month.
August IPCA-15 showed a slightly better breakdown than we expected.
Current Account | August 26, 2024
Despite the higher-than-expected deficit in July, we saw some stabilization of the current account deficit at the margin.
In IDAT services the increase was widespread by the categories.
Retail sales | August 11, 2024
Weak print does not significantly change our view of resilient activity in the 2Q.
Service setor | August 13, 2024
The service sector surprised to the upside again in June, but it's worth noting that there were downward revisions in April and May.
The July result matched the historical average for the month, after a strong result in June.
We expect the service component to remain under pressure, reflecting the tight labor market.
Trade Balance | August 6, 2024
After losing momentum at the beginning of this year, the trade balance seems to have stabilized at a level that is still historically high.
Copom Minutes | August 6, 2024
If the BRL fails to react, then a hiking cycle, starting in September, will become inevitable.
IDAT-Employment and Wage | August 5, 2024
IDAT-Employment continued to indicate resilience of formal employment, underscoring our expectation of the unemployment rate remaining at historically low levels in the coming months
For the moment, we expect the base rate to remain unchanged until year-end at 10.50% pa, albeit with rising concern on whether this will be enough to promote convergence.
Unemployment rate | July 31, 2024
The labor market remains tight, as unemployment falls further.
Going forward, it will be important to monitor additional spending control measures targeting not only 2024, but also 2025.
The Copom is likely to renew its promise of vigilance and state that it will assess whether the strategy of maintaining monetary policy at a contractionary level for a sufficient time will be able to ensure the process of disinflation and re-anchoring of expectations.
The seasonally-adjusted general delinquency rate increased 0.1p.p. to 3.3%.
Current Account | July 25, 2024
Despite the methodological review that resulted in a reduction in the level of the current account deficit, balance of payments data continued to show deterioration.
July's IPCA-15 came in above our expectation and with a worse-than-expected breakdown, especially due to the acceleration in underlying services.
Drop in goods but growth in services.
Similar to the retail sales data released yesterday, the services sector surprised to the upside in May, especially in services offered to families and transportation.
Retail sales came in above expectations in May, reinforcing the economic activity’s strength.
The June's IPCA came in below our call and with a benign composition, especially due to the slowdown in underlying services (to the lowest level recorded this year) and labor-related-services.
The trade balance started 2024 at a strong pace, but has been slowing down at the margin.
IDAT-Employment and Wage | July 4, 2024
Wages ended the second quarter at a lower level than that observed at the beginning of the year, but still with adjustments above inflation.
With the trade balance losing strength and financial outflows, the net flow is expected to be negative in the 2nd half of the year.
Industrial production | July 3, 2024
Industrial production fell in May, likely reflecting the impacts of the floods in Rio Grande do Sul.
Going forward, it will be important to monitor spending control measures to be implemented by the government.
Unemployment rate | June 28, 2024
The May’s PNAD dataset release underscores the view of a tight labor market in Brazil.
Quarterly Inflation Report | June, 2024
In addition to the usual revisions, the report brought important updates to estimates of the output gap, neutral interest rate and the BCB's small semi-structural models.
The seasonally-adjusted general delinquency rate retreated 0.1p.p. to 3.1%.
Despite the slowdown in underlying services, services linked to labor remained under pressure and showed no improvement at the margin.
We expect the Selic rate to remain stable at 10.50% pa throughout the policy horizon.
Current Account | June 24, 2024
Balance of payments data show deterioration in the current account, but external financing remains at comfortable levels.
The Copom delivered the expected decision, leaving the Selic rate unchanged at 10.50% pa, unanimously.
We expect the committee to unanimously decide to maintain the interest rate at 10.50% p.a.
Today's data corroborates the view of some moderation in economic activity in the 2nd quarter of the year.
Despite the monthly rise of services, the breakdown of the data points to some moderation of economic activity in the second quarter.
IPCA inflation in May was in line with our expectations, despite a slightly worse-than-expected breakdown, with underlying services accelerating again.
In IDAT-Services the decrease was widespread within the categories.
The trade balance started 2024 at a strong pace but is slowing down at the margin.
The Brazilian FX started 2023 with a positive performance, but with the trade balance losing momentum and financial outflows, the net flow should remain negative throughout the year.
IDAT-Employment and Wage | June 5, 2024
May’s IDAT-Employment continues to indicate resilience of formal employment, despite some growth moderation at the margin.
Industrial production | June 5, 2024
The drop in April’s industrial production was driven by mining, while the manufacturing segment came in above expectation.
Today's results came close to our expectations, with resilient consumption and a recovery in investment.
Tax collection has been stronger at the beginning of the year, but fiscal risks remain high.
Unemployment rate | May 29, 2024
Today’s release once again confirmed that the job market remains tight.
Despite a more benign reading in the May IPCA-15, it will be important to monitor the impacts of the floods in Rio Grande do Sul in the full-month IPCA report.
In April, non-earmarked loans decreased 0.9% in real terms and seasonally adjusted compared to the previous month, following five consecutive monthly increases.
Current Account | May 24, 2024
The current account deficit was US$2.5 bn in April, weaker than our call (result of -US$2.1 bn) and the market's expectation (-US$1.4 bn).
In both IDAT services and IDAT goods, the decrease was widespread across the categories.
The service sector increased in 1Q24, driven by the 'Services offered to households,' which expanded by 1.3% qoq/sa.
At the margin, the core average fell to 3.0% (from 3.5%).
The Copom cut the Selic by 25 bps, to 10.50% pa, in a split decision.
The Brazilian FX market registered a robust inflow in 2023 and started this year with a positive performance too, despite outflows in the financial segment.
The trade balance started 2024 at a strong pace but is starting to slow down.
IDAT-Employment and Wage | May 8, 2024
IDAT-Employment continues to indicate resilience of formal employment, corroborating our expectation that the unemployment rate will remain close to 7.8%.
Despite a decline in March, the broad retail sales expanded 2.5% in 1Q24.
In 12 months, the consolidated primary result reached a deficit of 2.3% of GDP in March.
We believe that the committee will decide to slow down the pace of rate cuts to 25 bps, taking the Selic rate to 10.50% pa.
Industrial production | May 3, 2024
In 1Q24, the industrial production advanced 0.3%, with an increase of 1.0% in manufacturing and a drop of 3.9% in the extractive segment (which tends to be more volatile).
The annual growth of outstanding loans accelerated to 4.2% in March (from 3.4%), in real terms.
The current account was negative by US$4.6 bn in March, a larger deficit than expectations.
Unemployment rate | 30 April , 2024
Labor market remained tight in March.
April's IPCA-15 was lower than expected, this time with a downward surprise in airfare and other items that are not part of the underlying inflation (electricity and gasoline).
In March, the IDAT-Activity grew by 3.9% mom/sa, with an increase in the IDAT-Services (4.0% mom/sa) and IDAT-Goods (3.9%).
Service setor | April 12, 2024
For March, we expect some increase in the service sector, with the services offered to households as the positive highlight.
We believe that 1H24 will be stronger than we previously expected, leading to an upward bias to our GDP forecast for 24, currently at +2.0%.
March IPCA came in lower than expected, with a downward surprise in core inflation.
IDAT-Employment and Wage | April 8, 2024
IDAT-Employment continues to indicate resilience in formal employment, corroborating our expectation that the unemployment rate will remain close to 7.8%.
Fiscal | April 5, 2024 (Ref. Mar)
Tax collection has been stronger at the beginning of the year, but fiscal risks remain high.
The Brazilian FX market started the year with a positive performance, despite outflows in the financial segment.
The trade balance started 2024 at a strong pace, and we expect it to continue ahead, with a structural improvement in the Brazilian trade balance.
Current Account | April 4, 2024
We expect the dynamics of the external accounts to continue on a favorable trajectory throughout this year.
In February, the seasonally-adjusted general delinquency rate remained virtually stable at 3.3%.
Unemployment rate | March 28, 2024
Today's data corroborates our view of a tight labor market, with a further drop in unemployment.
Quarterly Inflation Report | March, 2024
In our view, the forecasts are broadly consistent with our call that the Selic rate should end the cycle at 9.25%.
March IPCA-15 came in higher than expected, with an upward surprise in underlying services.
Copom Minutes | March 26, 2024
We maintain our view of a terminal rate of 9.25% pa, but also in a data dependent manner.
The committee opted to shorten its guidance amidst more uncertainty, signaling another 50-bp move in its next meeting (singular).
Copom Cockpit | March 15, 2024
We forecast a 50bp-cut in the Selic rate, with authorities affirming in the statement that they foresee, at this moment, reductions of the same magnitude in the following meetings.
Service setor | March 15, 2024
The positive service sector and retail sales prints in January corroborate a strong GDP in the 1Q24.
This number aligns with January's strong labor market numbers and puts an upward bias in 1Q24 GDP.
IDAT-Employment and Wage | March 13, 2024
February’s IDAT-Employment continues to indicate resilience in formal employment, corroborating our expectation that the unemployment rate will remain close to 7.8%.
February preliminary estimates suggest the services offered to households (PMS) receding 0.2% mom/sa.
The composition of this release was better than expected, with downside surprise in underlying industrials and underlying services.
For households, new non-earmarked loans increased 2.6%, while for non-financial corporations declined 3.1%.
The Brazilian FX market registered a robust inflow in 2023 and started this year with a positive performance, despite the outflows in the financial segment.
The fiscal risks remain high given the uncertainty about the impact revenue-raising measures.
The trade balance started 2024 at a strong pace, above the seasonal pattern for January and February.
Current Account | March 6, 2024
We expect that the dynamics of external accounts will continue on a favorable trajectory throughout this year, mainly with the good performance of the trade balance.
Industrial production | March 6, 2024
Industrial production receded in January, dragged by a decline in the mining/extractive sector.
Our call for 2024 GDP growth stands at 1.8% for now, but we continue to see an upward bias for this forecast.
Unemployment rate | February 29, 2024
January data continue to show resilience in the labor market.
The composition of this release was also better than expected with downside surprises in underlying industrials.
January preliminary estimates suggest the services offered to households.
Service setor | February 9, 2024
Today's number does not change our GDP tracking for 4Q23, which stood at -0.2%qoq/sa (1.8%yoy).
January’s result was driven by an inflow of US$ 4.7 bn in the trade front and US$ 510 mm in the finance segment.
The composition of this release was worse than expected with an upward surprise in underlying industrials, in addition to more pressured underlying services.
Trade Balance | February 7, 2024
The robust pace of foreign trade should continue in the coming years, with a structural improvement in the Brazilian trade balance.
IDAT-Employment and Wage | February 7, 2024
January’s IDAT-Employment continued to indicate that formal employment is stabilizing.
General government gross debt rose to 74.3% in December from 73.8% of GDP in November.
Retail sales | February 7, 2024
Retail sales retreated in December, weaker than expectations.
In December, new non-earmarked loans grew 1.2% in real terms and seasonally adjusted.
Copom Minutes | February 6, 2024
The minutes do not change our overall assessment of how the easing cycle will evolve, with the 50-bp pace being maintained ahead, and a terminal rate of 9.00% pa.
Current Account | February 5, 2024
Current account deficit reached US$5.8 bn in Dec/23, better than expectations.
Industrial production | February 2, 2024
The carry over for 2024 stands at 2.1%, with the following breakdown: 0.8% for manufacturing and 7.8% for mining/extractive.
We still expect the policy rate to end the year at 9.00%
Unemployment rate | January 31, 2024
December's data showed a resilient labor market, with an increase in both formal and informal employment.
Copom Cockpit | January 29, 2024
We anticipate a 50-bp cut and signaling of reductions no change in pace in the following meetings.
January's IPCA-15 brings an upward surprise in underlying services, despite a downward surprise in the headline.
Retail sales | January 17, 2024
For December, our daily activity indicator, IDAT-Activity, points to an increase in both the core and broad indexes.
Service setor | January 16, 2024
For December, our daily economic activity indicator (IDAT-Activity) points to a deceleration in the services offered to households.
For 2024, we expect the ongoing disinflation process to continue, with the IPCA at 3.6% by year-end.
Trade Balance | January 5, 2024
We forecast a surplus of US$80 billion in the trade balance in 2024 and US$60 billion in 2025.
Industrial production | January 5, 2024
Extractive segment once more supported the monthly increase.
IDAT-Employment and Wage | January 5, 2024
Wages have been showing some acceleration at the margin, after losing momentum in the middle of the last year.
General government gross debt rose to 73.8% of GDP in November from 73.7% in October.
The Brazilian FX market registered a robust inflow in 2023, a result of the good performance of the trade segment.
The average spread and interest rate of the system retreated.
Current Account | January 3, 2024
November's current account result, although slightly below expectations, continues to indicate a comfortable situation in external accounts.
Unemployment rate | December 29, 2023
The unemployment rate moved up due to the decline in employment, as the participation rate remained broadly stable.
At the margin, core inflation continued to show a benign composition.
Quarterly Inflation Report | December, 2023
The December report shows forecasts that are largely consistent with our expectation that the Selic rate should end the easing cycle at around 9.00% p.a., still in contractionary territory.
Copom Minutes | December 19, 2023
The base case for the next meetings remains a sequence of 50-bp moves.
Retail sales | December 14, 2023
Although today's release was weaker than expected, our IDAT-Activity points to an increase in the core index in November.
We still expect the cycle to end with the Selic rate at 9.50% pa, but may revisit the call in light of recent events.
Service setor | December 13, 2023
Services sector below expectations in October.
November's IPCA reading once again brought a benign composition.
Copom Cockpit | December 08, 2023
We expect a 50-bp Selic rate cut to 11.75% p.a. in the next Copom meeting, on December 12th and 13th, with the maintenance of the guidance regarding keeping the same easing pace in the next meetings.
Year-to-date through November, the flow was positive by US$24.5 bn.
IDAT-Employment and Wage | December 7, 2023
Wages showed some acceleration at the margin, after a long period of losing momentum.
In 12 months, the consolidated primary result went from a deficit of 1.0% in September to a deficit of 1.1% of GDP in October.
The seasonally adjusted delinquency rate decreased 0.1 p.p. to 3.4%.
3Q23 GDP points to a slowdown in the economy.
Current Account | December 4, 2023
The current account result in October continued to indicate a comfortable situation in the external accounts.
Trade Balance | December 1, 2023
We expect the trade balance to continue operating at high levels throughout the next year.
Industrial production | December 1, 2023
Manufacturing remained stable, while the mining/extractive segments contracted 1.1% at the margin, both below our expectations.
Unemployment rate | November 30, 2023
October's data continued to show mixed signs.
Core inflation continued to decline, reinforcing a sequence of data that confirms the ongoing disinflation process.
The IDAT-Activity has been showing some deceleration in the economy, especially in the goods sector. For the 4Q23, we also expect a slowdown in the service sector, due to the weakening of disposable income.
Service setor | November 14, 2023
Our GDP tracking for the 3Q23 remained at -0.2% qoq/sa (+1.8% yoy).
Core inflation continued to decline, reinforcing a sequence of data prints that confirm the ongoing disinflation process.
Keeping the next couple of months close to the historical average, this year's flow would close in positive territory at almost US$ 17 bn.
Fiscal risks increased again with discussions about an early change in next year's primary result target.
Retail sales | November 8, 2023
Core retail sales above market expectations.
The seasonally adjusted delinquency rate stood virtually unchanged at 3.6%.
IDAT-Employment and Wage | November 7, 2023
Stable employment and rising wages in September.
Copom Minutes | November 7, 2023
We expect the committee to reduce the Selic rate to 11.75% pa in the December meeting, and to 9.50% pa in 2024.
Current Account | November 6, 2023
Our forecast for the current account deficit this year is US$ 30 billion (1.5% of GDP).
Given today's statement and the uncertainties on the global and domestic scenarios, we now expect the Selic rate at 9.50% by the end of the cycle, and at 11.75% by the end of this year.
Trade Balance | November 1, 2023
Trade balance remains with a strong pace, mainly due to exports.
Industrial production | November 1, 2023
Industrial production virtually stable in September.
Unemployment rate | October 31, 2023
Unemployment rate in line with expectations.
Copom Cockpit | October 27, 2023
We anticipate a 50-bp cut in the Selic benchmark rate to 12.25% pa, with the authorities repeating, in the statement, that they foresee reductions of the same magnitude in the next meetings.
The diffusion metric, both for the full index and for the IPCA-EX3 core, continued to show an additional drop, signaling greater disinflation ahead.
Retail sales | October 18, 2023
Core retail sales surprise upwards in August.
Service setor | October 17, 2023
Services surprised negatively in August.
The surprise in today's data indicates a downward bias for our 4.9% IPCA forecast for the full year.
IDAT-Employment and Wage | October 5, 2023
Labor market remains resilient.
The Brazilian FX market registers a robust inflow in 2023, because of the good performance of the trade segment.
Industrial production | October 3, 2023
Industrial production advanced, but below expectations in August.
Trade Balance | October 2, 2023
The trade balance remains at a strong pace, driven mainly by exports.
Primary result will likely return to a deficit this year.
Unemployment rate | September 29, 2023
Unemployment rate remained stable in August.
Quarterly Inflation Report | September, 2023
In our view, the forecasts are broadly consistent with our call that the Selic rate should end the cycle around 9.00%.
New non-earmarked loans remained stable in real terms in comparison with the previous month.
The September IPCA-15 reading showed continuity of the disinflation process with benign core composition.
Copom Minutes | September 26, 2023
We maintain our Selic rate forecast at 11.50% for year-end, and expect that, as the information set evolves, the committee will opt for an acceleration in December.
Current Account | September 25, 2023
The current account result for August continues to indicate a comfortable situation in the external accounts, with a current account deficit similar to inflows in the financing side of the balance sheet.
We continue to expect the Copom to take the Selic rate to 11.50% pa by year-end, and to 9.0% pa by the end of the cycle in 2024.
IDAT-Activity loses momentum at the end of August.
Copom Cockpit | September 15, 2023
We expect the Copom to cut the Selic rate by 50bp, without opening room for discussion about faster cuts in the short run
Retail sales | September 15, 2023
Weak broad retail, driven by auto sales.
Service setor | September 14, 2023
Service sector’s real revenue in line with expectations in July.
Underlying services slowed down to 4.1% (from 5.4%), while core industrials accelerated to 3.8% (from 3.6%).
The Brazilian FX market registers a robust inflow in 2023, because of the good performance of the trade segment.
IDAT-Employment and Wage | September 6, 2023
Labor market remains resilient.
Industrial production | September 5, 2023
Industrial production worse than expected in July.
Trade Balance | September 1, 2023
The trade balance remains at a strong pace, driven mainly by exports.
2Q23 GDP above expectations.
The consolidated public sector registered a primary budget deficit of BRL 35.8 bn in July, worse than our expectation of a BRL 30.2 bn deficit.
Unemployment rate | August 31, 2023
Unemployment rate in line with expectations.
New non-earmarked loans decreased 1.0% mom/sa in real terms in July.
Current Account | August 25, 2023
Current account result for July continues to indicate a comfortable situation in the external accounts.
The reading of the IPCA-15 in August corroborates the ongoing disinflation scenario, but indicates that the process will be gradual.
Negative IDAT-Activity driven by the goods segment in July.
Compared to our forecast, we highlight a small upward surprise in food and underlying industrials (clothing and personal care), but a more benign opening of underlying services.
Service setor | August 10, 2023
Service sector real revenue in line with expectations in June.
Year-to-date through August 4, FX flow is positive by $19.1 bn.
Retail sales showed a positive surprise in June.
Copom Minutes | August 8, 2023
We maintain our forecast that the Selic rate will end the year at 11.75% pa.
IDAT-Employment and Wage | August 4, 2023
The July’s IDAT-Employment showed a deceleration in the pace of recovery in the job market.
For now, we change our year-end Selic rate forecast to 11.75%, and will wait for the minutes on Tuesday before we consider additional changes.
Trade Balance | August 1, 2023
The trade balance registered a surplus of US$ 9.0 billion in July.
Industrial production | August 1, 2023
Statistical carry-over of 3Q23 industrial production slightly positive.
We believe that the first rate cut will be more contained in magnitude (that is, a 25-bp reduction).
Unemployment rate | July 28, 2023
Labor market remains resiliente.
Primary result in 12 months goes into deficit.
The seasonally adjusted delinquency rate ticked 0.1p.p. up to 3.6%.
Current Account | July 26, 2023
Despite a worse-than-expected reading, the current account result for June continues to indicate a comfortable situation in the external accounts.
IPCA-15 in July underscores the ongoing disinflation scenario, although inflation more linked to inertia and labor market follows a slow downward trend.
IDAT-Activity receded in June, dragged by goods consumption.
Out of 10 retail sectors, five contracted at the margin.
In May, the service sector's real revenue expanded by 0.9% mom/sa, above expectations.
June’s IPCA reading confirms disinflation in tradables, but also increased pressure in services.
IDAT-Employment and Wage | July 6, 2023
Labor market remains resilient.
Accumulated until June, total flow is positive by US$ 15 bn.
Industrial production | July 4, 2023
Industrial production should end 2Q23 close to stability.
We expect a trade surplus of US$ 70 billion in 2023.
Unemployment rate | June 30, 2023
Labor market remains resilient.
In 12 months, the consolidated primary surplus decreased to 0.4% of GDP in May (from 0.5%).
Quarterly Inflation Report | June 29, 2023
We expect the easing cycle to begin in August.
The seasonally adjusted delinquency rate ticked 0. 1p.p. up to 3.5%.
June’s IPCA-15 substantiates the ongoing disinflation scenario, although inflation more tied to inertial components continues on a slow trajectory of decline.
We now expect a 25-bp rate cut in August.
Current Account | June 26, 2023
The current account deficit in 12 months totaled US$ 48.5 bn (2.45% of GDP).
We continue to expect the easing cycle to start in September.
Slowdown in goods spending.
The committee should remove the caveat that it will not hesitate to resume the adjustment cycle if necessary.
After increases in February and March, services retreated in April.
Helped by the statistical carry-over, retail sales should be positive in 2Q23.
The Brazilian FX market registers a robust inflow in 2023, as a result of the good performance of the trade segment.
Together, food and gasoline account for virtually all the surprise in today's data.
IDAT-Employment and Wage | June 6, 2023
Resilience labor market.
Industrial production | June 2, 2023
Industrial production should be relatively stable in 2Q23.
The accumulated trade surplus in the first five months of the year is US$ 35.3 billion.
Statistical carry over stands at 2.1% after 1Q23 GDP.
Unemployment rate | May 31, 2023
Growing formal and informal employment.
Stronger primary surplus does not remove the challenge of implementing the new fiscal rule.
The annual growth of outstanding loans went from 7.1% to 6.7% in April, in real terms.
Current Account | May 26, 2023
Our forecast for the current account deficit this year is US$ 35 billion (1.7% of GDP).
May’s IPCA-15 reading substantiates the ongoing disinflation scenario, although core measures continue to run above the inflation target band.
IDAT-Activity advances in April driven by the goods segment.
Positive statistical carry-over for the 2Q23 in retail sales.
Positive statistical carry-over for the 2Q23 in the service sector.
In 12 months, the index reached 4.2% (from 4.7% in March).
Industrial production | May 10, 2023
The statistical carry-over of industrial production is positive for the 2Q23.
The minutes maintained the tone of the statement; we continue to expect the easing cycle to start in October/November.
IDAT-Employment and Wage | May 4, 2023
Resilient labor market.
We still expect the Copom to begin a cautious easing cycle in its October 31/ November 1 meeting, taking the Selic rate to 12.50% by year-end.
Year to date, total flow is positive by US$ 13.5 billion, above previous years.
We have an upward bias in our trade surplus forecast for 2023, currently at US$60 billion.
Unemployment rate | April 28, 2023
Both CAGED and PNAD data showed a more resilient labor market in March.
Copom Cockpit | April 28, 2023
Once more, the committee will likely reinforce the maintenance of its vigilant stance and its perseverance in the disinflation process.
Going forward, the challenge is the implementation of the targeted primary trajectory.
Service setor | April 27, 2023
Gradual deceleration is expected ahead.
New non-earmarked loans decline in March, still dragged by corporate credit.
We forecast IPCA at 6.1% by yearend and at 4.5% in 2024.
Retail sales will likely remain stable in March and April.
Current Account | April 25, 2023
Current account surplus in March.
Industrial production | April 19, 2023
Industrial production will likely advance in March, but the outlook for the year is for a slowdown.
Mixed signs in March.
Service setor | April 14, 2023
Mixed signs in the service sector in January.
Retail sales will likely lose stem throughout the year.
Core inflation measures, both for goods and services, came in slightly below expectations, confirming a gradual disinflation outlook.
IDAT-Employment and Wage | April 6, 2023
Gradual slowdown in formal employment growth, but wages with no signs of retreat.
Year to date, total flow is positive by US$ 12.5 billion.
The trade balance started the year at a strong pace, driven by exports, while imports keep losing strength at the margin.
Going forward, the challenge is the implementation of the targeted primary trajectory.
Unemployment rate | March 31, 2023
Labor market deceleration is likely to continue ahead.
Industrial production | March 28, 2023
Weakness in the manufacturing segment will continue ahead.
Quarterly Inflation Report | March 28, 2022
The Inflation Report shows forecasts that are consistent, in our view, with the Selic rate remaining at 13.75% for an extended period.
Seasonally-adjusted delinquency rate increased by 0.1 p.p. to 3.3%.
Copom Minutes | March 28, 2023
The key message is that monetary policy should be patient and serene, and that a rate cut it is not imminent.
Current Account | March 27, 2022
The flow of investments in the country continues at a consistent pace at the margin.
March‘s IPCA-15 reading substantiates the ongoing disinflation scenario, although core measures continue to run above the inflation target band.
The Copom left the base rate unchanged at 13.75%, and its statement did not bring indications of easing earlier than expected.
Copom Cockpit | March 17, 2023
We expect the committee to keep the Selic rate at 13.75%, with symmetrical risks to inflation.
Unemployment rate | March 17, 2023
January data consolidates the weakening of labor market in progress.
After a strong reading in January, IDAT decelerates in February.
February’s IPCA reading continued to indicate a gradual disinflation outlook, with the headline decelerating in 12 months.
Year to date, total flow is positive by US$ 10 billion.
Economic activity decelerated in the 2H22.
Export prices fall in February.
January primary surplus in line with seasonality.
Unemployment rate | February 28, 2022
Signs of deceleration in the labor market continue.
Seasonally-adjusted delinquency rate increased by 0.1 p.p. to 3.2%.
Current Account | February 24, 2022
We forecast a current account deficit of 2.3% in 2023.
February IPCA-15 rises 0.76% pressured by education readjustments.
Service Sector | February 10, 2023
Deceleration is likely to continue ahead
Retail sales | February 9, 2022
Widespread drop in December
January IPCA continued to indicate a slowdown in the inflation trajectory, with core measures losing strength at the margin.
In 2023, the market registered so far an inflow of US$ 5.2 billion.
Copom Minutes | February 7, 2023
We continue to see upside risks to our year-end 12.5% pa forecast.
IDAT-Employment and Wage | February 7, 2023
IDAT-Employment with lower deceleration and IDAT-Wage still under pressure.
Industrial production | February 3, 2023
Weakness in the industrial production should continue ahead.
Today's meeting places extra uncertainty about the feasibility of rate cuts this year.
Trade Balance | February 1, 2023
Exports start the year on a strong note.
Brazil Review | The Brazilian economy in Jan, 2023
IPCA ends 2022 at 5.8%; IPCA-15 rises 0.55% in January, suggesting upward bias for 2023.
Unemployment rate | February 27, 2025
The unemployment rate remained flat due to the stability in both the employment and the labor force.
The surplus in 2022 was due to temporary factors or those that will have a smaller impact this year.
Seasonally-adjusted delinquency rate increased by 0.1 p.p. to 3.1%.
Copom Cockpit | January 27, 2023
Copom to indicate still-symmetrical risks to inflation, but with warnings to the fiscal and inflation target outlooks.
Current Account | January 26, 2023
We expect a 2.3% of GDP current account deficit this year.
The IPCA-15 was higher than expected and brought an upward bias to the end-month IPCA print and the year’s forecast.
Unemployment rate | January 19, 2023
The deceleration in labor market will likely continue ahead.
Economy decelerates in the end of the year.
Service Sector | January 12, 2023
Services offered to households should continue to decelerate in the coming months.
Retail sales | January 11, 2023
Weakness in retail sales should continue in the coming months.
IPCA | January 10, 2023
We forecast a 5.7% increase in 2023.
Brazil Review | The Brazilian economy in Dec, 22
The focus now relies on the economic policy signals, especially those related to taxation and public spending.
Industrial production | January 5, 2023
Industrial production may end 4Q22 in negative territory.
IDAT-Employment and Wage | January 5, 2023
Employment growth decelerates again in December.
FX market | January 4, 2023
The FX market posted a net outflow of US$ 12.48 billion in December.
Trade Balance | January 2, 2023
Trade balance ends 2022 with a surplus of US$ 62.3 billion.
History - Macro Vision
The breakdown of GDP came broadly in line with our expectations, reinforcing the outlook for a gradual slowdown in activity over the coming quarters.
Primary deficit of BRL66.6bn in July
Non-earmarked loans rose 2.3%, while earmarked credit concessions fell by 3.5%, in real terms and seasonally adjusted.
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.
Economic impacts of a tax reform
2024/01/24 | Impacts of the Indian tax reform: parallel with the Brazilian reform.
IDAT-Activity: adjusting the scope
2024/01/12 | We are updating IDAT Expanded Payment Methods to turn it into an indicator based on payments made by individuals.
We expect a decline of 0.2% in 3Q23 GDP
2023/12/01 | The services sector should slow down noticeably, advancing 1.3% yoy (vs. 2.3% in 2Q23).
IDAT-Activity: expanding the scope
2023/11/29 | We have expanded the scope of IDAT-Activity to include flows of other payment methods.
Services inflation: Is it different this time?
2023/10/10 | The labor market shows signs of heating, but due to cyclical and structural factors, evaluating the services inflation is challenging.
Reassessing international reserves
2023/09/05 | In our view, if the global situation allows, authorities should consider restarting a program to rebuild net reserves.
We expect a 0.3% GDP growth in the 2Q23
2023/08/25 | 2Q23 GDP should have advanced 0.3%, driven by services.
We now expect a 5.1% increase in the IPCA in 2023
2023/08/15 | Upward revision of inflation for the year with increase in fuel prices.
2023/07/28 | We expect the Brazilian Central Bank to be cautious when starting the easing cycle (that is, with a -25bps cut in the Selic benchmark rate to 13.50% from 13.75% pa).
El Niño to impact mostly corn and soybean crops
2023/07/20 | With an El Niño less intense than that of 2015-16, impacts on agricultural GDP and inflation should be limited.
2023/07/18 | Important reform that brings positive effects to the economy
Continuous inflation targeting regime
2023/06/15 | We expect the government/CMN to confirm the inflation target at 3%, with tolerance range of 1.5pp and move the target from calendar year to a continuous target.
We forecast 1Q23 GDP growth at 1.4% qoq/sa
2023/05/25 | Agriculture, resilient labor market and fiscal impulse sustained the economic activity in 1Q23.
Fuel price reduce our forecast for inflation in 23
2023/05/16 | Downward revision in 2023 inflation estimate.
Guide to the Government’s revenue measures
2023/05/16 | If measures are implemented, fiscal risk perception could decline.
Fiscal rules: FAQs Fiscal framework
2023/05/09 | Proposal is pivotal and is being debated in Congress.
Fiscal rules: FAQs and basic principles
2023/03/07 | New fiscal framework will be key to reduce the perception of fiscal risks.
Economic activity slowed down at the end of 2022.
Higher target, higher inflation
Raising inflation target would increase inflation and would not reduce the interest rate.
Analytics, Big Data & Real Time Economics
January, 2023.
Macro Insights – 2023 fiscal expansion
Values above R$ 96 billion represent a significant fiscal expansion next year.
We forecast 2.8% GDP growth in 2022
We anticipate a 0.5% increase in GDP in 3Q22.
Electoral Polls Tracker – Aggregator
2022/10/28 |See the charts with the moving average of the results of the eight latest polls.
Electoral Polls Tracker – Datafolha
2022/09/30 | See the charts with the results of the poll, including the breakdown by region, income, gender, education level, age, etc...
Selic rate to remain high for a long time
2022/09/22 | The expected dynamics for inflation and the output gap should prevent interest rate cuts in 1H23.
We expect employment growth to lose momentum over the next few months.
Electoral Polls Tracker – Ipec
2022/09/20 |See the charts with the results of the poll, including the breakdown by region, income, gender, education level, age, etc...
Analytics, Big Data & Real Time Economics
September 19, 2022.
Algorithm for reading CB meeting minutes
2022/08/23 | Algorithm for reading minutes indicates the end of the BCB cycle.
Macro Insights – Fiscal policy roadmap
In this report, we discuss the five main fiscal policy decisions that you should watch over the next months.
IDAT - Activity: methodology revision
27/07/2022 | We are revising the methodology and release format of our proprietary economic activity index.
We revised our 2022 IPCA forecast to 7.5% from 8.7%
28/06/2022 | We maintain the forecast for 2023 at 5.6%.
Analytics, Big Data & Real Time Economics
February 21, 2022.
February 17, 2022.
Disinflation in 22 with the Selic contractionary
January 14, 2022 | Disinflation will mainly come from regulated prices and tradables, but there are risks.
Fiscal: Why did it improve in 2021
January 12, 2022 | Reaching the fiscal equilibrium still a challenge.
How will industrial supply and demand rebalance?
October 13, 2021 | Demand for industrial goods is set to decline.
Water crisis: what to expect in 2022
September 24, 2021 | In case of rationing, we expect slower growth, accelerating inflation and an increase in interest rates.
IPCA x target deviation and monetary policy
September 08, 2021 | A Selic rate approx. 100 bps above the neutral rate seems consistent with the current deviation of IPCA.
What about the fiscal situation in the states?
September 02, 2021 | States are seeing a temporary improvement, but still have a structural challenge ahead.
Water crisis and IPCA forecast revision
September 01, 2021 | We revised our 2021 inflation forecast to 7.7% from 6.9% previously.
"Precatórios", spending cap & fiscal discipline
August 30, 2021 | Fiscal improvements shouldn’t lead to a permanent deterioration in the fiscal framework.
Formal labor market vs. service inflation
August 16, 2021 | The level of formal employment has fully recovered from the pandemics shock.
July 30, 2021 | The proposal brings Brazil closer to the international standard of corporate taxation.
July 26, 2021 | The proposal affects around 30 million people.
10 FAQs - Reform of Income and Profit Taxes
July 20, 2021 | The proposal is being debated in Congress.
Economies return to their pre-pandemic GDP
June 16, 2021 | When will economies return to their pre-pandemic GDP levels and trends?
Electricity: Rainfall and Rationing Risks
June 02, 2021 | Rationing is still very unlikely (probability under 5%).
We forecast 5% GDP growth in 2021
May 27, 2021 | GDP continues to expand in 2021H1.
IDAT-Wage: no pressure on service inflation
May 06, 2021 | With a partial recovery of the labor market, we do not see demand-led inflationary pressure via wage dynamics.
IDAT - Employment and recovery of the formal labor
May 11, 2021 | We revised our year-end unemployment rate estimate to 12.7%, from 14.3%, seasonally adjusted.
Will EM currencies benefit from high commodity?
April 27, 2021 | International commodity prices have decoupled from the currencies of countries that export these products.
Breaking down inflation in years of recession
February 01, 2021 | in Brazil, the consumer price index IPCA ended 2020 0.50 p.p. above the inflation target.