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Brazil | Economic Analysis

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

Macro Brazil

  • IDAT-Activity | 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).

  • COPOM | May 7, 2025

    The Copom delivered the expected (by us and most of the market) decision, a 50-bp hike, taking the policy rate to 14.75%.

  • Trade Balance | May 7, 2025

    We expect the trade balance to further expand given the expectation of a record harvest and the economic activity slowdown.

  • FX market | May 7, 2025

    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.

  • IDAT-cars | May 6, 2025

    New car, low-mileage and used car prices declined.

  • Copom Cockpit | May 5, 2025

    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.

  • Credit | April 30, 2025

    The delinquency rate, with seasonal adjustment, remained broadly stable at 3.2%.

  • Fiscal | April 30, 2025

    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.

  • IPCA-15 | April 25, 2025

    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.

  • Credit | April 9, 2025

    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.

  • FX market | April 9, 2025

    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.

  • Retail sales | April 9, 2025

    As expected, sales of credit-sensitive goods weakened, while sales of income-sensitive goods increased.

  • Fiscal | April 8, 2025

    We do not expect the government to meet the primary result target this year, even with the ongoing efforts in the revenue agenda.

  • Trade Balance | April 4, 2025

    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

  • IDAT-cars | April 2, 2025

    New car and used prices increased, while low-mileage car prices declined.

  • 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

  • IPCA-15 | March 27, 2025

    The downside surprise was concentrated in industrials, suggesting that the pass-through of the exchange rate depreciation may be less intense than we expected.

Brazil Scenario Review

  • 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.

  • Scenario | February, 2023

    We maintain our forecasts for the Selic at 12.50% in 2023, but see risks to the upside.

Macro Vision

  • 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.

  • Economic impacts of a tax reform

    2024/01/24 | Impacts of the Indian tax reform: parallel with the Brazilian reform.

History - Macro Brazil

History - Macro Vision