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Brazil | Economic Analysis

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

Macro Brazil

  • Copom Cockpit | June 14, 2024

    We expect the committee to unanimously decide to maintain the interest rate at 10.50% p.a.

  • Retail sales | June 13, 2024

    Today's data corroborates the view of some moderation in economic activity in the 2nd quarter of the year.

  • IDAT-Activity

    Daily Economic Activity Tracker.

  • Service setor | June 12, 2024

    Despite the monthly rise of services, the breakdown of the data points to some moderation of economic activity in the second quarter.

  • IPCA | May 10, 2024

    IPCA inflation in May was in line with our expectations, despite a slightly worse-than-expected breakdown, with underlying services accelerating again.

  • May IDAT-Activity Report

    In IDAT-Services the decrease was widespread within the categories.

  • Trade Balance | June 6, 2024

    The trade balance started 2024 at a strong pace but is slowing down at the margin.

  • FX market | June 5, 2024

    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.

  • GDP | 1Q24

    Today's results came close to our expectations, with resilient consumption and a recovery in investment.

  • Fiscal | May 29, 2024

    Tax collection has been stronger at the beginning of the year, but fiscal risks remain high.

  • Unemployment rate | 29 May , 2024

    Today’s release once again confirmed that the job market remains tight.

  • IPCA-15 | 28 May , 2024

    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.

  • Credit | May 27, 2024

    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).

  • April IDAT-Activity Report

    In both IDAT services and IDAT goods, the decrease was widespread across the categories.

  • Service setor | May 14, 2024

    The service sector increased in 1Q24, driven by the 'Services offered to households,' which expanded by 1.3% qoq/sa.

  • IPCA | May 10, 2024

    At the margin, the core average fell to 3.0% (from 3.5%).

  • Copom | May 8, 2024

    The Copom cut the Selic by 25 bps, to 10.50% pa, in a split decision.

  • FX market | May 8, 2024

    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.

  • Trade Balance | May 8, 2024

    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%.

  • Retail sales | May 8, 2024

    Despite a decline in March, the broad retail sales expanded 2.5% in 1Q24.

  • Fiscal | May 6, 2024

    In 12 months, the consolidated primary result reached a deficit of 2.3% of GDP in March.

  • Copom Cockpit | May 6, 2024

    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.

  • Credit | May 3, 2024

    The annual growth of outstanding loans accelerated to 4.2% in March (from 3.4%), in real terms.

  • 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).

  • Current Account | May 2, 2024

    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

Brazil Scenario Review

  • 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.

  • Scenario | January, 2023

    In the absence of corrective actions, this scenario could lead to a new cycle of low growth, high inflation and Selic rate.

  • Scenario | December, 2022

    A rising public debt trend could lead to a new cycle of lower growth, high inflation and high interest rates.

  • Brazil Orange Book - N38 | November, 2022

    High interest rates: a bitter medicine.

  • Scenario | November, 2022

    Fiscal sustainability will continue to be the main challenge in the next administration.

  • Scenario | October, 2022

    We lowered our inflation forecasts for 2022 and 2023.

  • Scenario | September, 2022

    We expect lower inflation in 2022 and stronger GDP growth in 2022 and 2023.

  • Scenario | August, 2022

    We expect stronger 22 GDP growth, with more growth in the 2Q; we also expect the Copom to end the tightening cycle at 13.75%.

  • Scenario | July, 2022

    Lower IPCA forecast and higher GDP estimate for 2022, but fiscal sustainability is turning into a significant challenge.

  • Scenario | June, 2022

    We revised upwards our IPCA forecast to 8.7% from 8.5%, in 2022, and to 5.6% from 4.2%, in 2023.

  • Scenario | May, 2022

    We changed our IPCA 2022 forecast to 8.5% from 7.5%, due to higher regulated and market-set prices.

  • Brazil Orange Book - N37 | January 2022

    The steep economic recovery has lost momentum, but its side effects are still quite present.

Macro Vision

  • 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.

  • 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.

  • No jumping the gun

    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.

  • Tax reform: 10 FAQs

    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.

  • We estimate flat GDP in 4Q22

    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.

History - Macro Brazil

History - Macro Vision