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COUNTRY INSIGHTS

Up, Up and Away: Inflationary Impulses Ahead
BRAZIL ECONOMICS · Report · 01 Jul 2024

Recent inflation dynamics are showing unfavorable signs that require attention. IPCA-15 underlying measures accelerated, and the pressure is expected to continue, reflecting an economic activity close to or above full employment. Simultaneously, the depreciation of the real causes an additional s...

Much Ado About Nothing
BRAZIL ECONOMICS · Report · 27 Jun 2024

Decree 12.079 has been published, establishing the legal framework for changing the methodology of inflation target measurement: instead of verifying whether the target has been met (i.e., whether the observed inflation was within the tolerance range defined by the National Monetary Council, CMN)...

Promises That Cannot Be Kept
BRAZIL ECONOMICS · Report · 25 Jun 2024

In line with the statement released last week, when Copom announced the decision to halt the monetary easing cycle and maintain the Selic rate target at 10.50% per year, the Minutes of the meeting came out quite harsh, signaling no room for a reduction in the basic interest rate in the coming mon...

Reality Check
BRAZIL ECONOMICS · Report · 24 Jun 2024

Domestic demand will continue to lead growth throughout the year, as it did in the first quarter, while GDP is near or above potential. Thus, we expect part of the additional demand to be met through increased imports (and/or reduced exports) and that GDP growth in 2024, also reflecting the negat...

Webinar Replay - Brazil: The Good, the Bad and the Ugly
BRAZIL ECONOMICS · Report · 21 Jun 2024

Visit our calendar page to watch the replay of our webinar on Brazil's monetary and fiscal policy and its impact on the country's macroeconomic outlook. What is the Central Bank of Brazil signaling about the future of the country's monetary policy? How will the increasing inflation expectations b...

Temporary Relief in the Storm
BRAZIL ECONOMICS · Report · 20 Jun 2024

This time there were no surprises as the Central Bank's Monetary Policy Committee (Copom) decided, as expected, not only to maintain the target for the benchmark interest rate at 10.5% per year but also did so unanimously, scaling down – at least for now – fears of another divided decision, which...

Slide Presentation - Brazil: The Good, the Bad and the Ugly
BRAZIL ECONOMICS · Report · 20 Jun 2024

Get insight into Brazil's monetary and fiscal policy and its impact on the country's macroeconomic outlook with the slide presentation from our webinar, "Brazil: The Good, the Bad and the Ugly".

The Challenge of Seasonality
BRAZIL ECONOMICS · Report · 18 Jun 2024

According to the Monthly Retail Trade Survey (PMC), broad retail fell 1% in April, a contraction following 2.5% growth in the first quarter. However, it is noteworthy the discrepancy between this result and the growth of restricted retail (0.9%), vehicles and parts (1.6%), and building materials ...

A Hostile World Demands Coherence in Economic Policy Management
BRAZIL ECONOMICS · Report · 17 Jun 2024

The depreciation of the Brazilian real, which began late last year, has gained momentum in recent months. Part of this movement occurred alongside the appreciation of the dollar, but recently domestic factors have been predominant. The currency weakening occurs despite a positive exchange flow, d...

Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 10 Jun 2024

OVERVIEW SPENDING VOLUME DOES NOT SUBSTITUTE FOR EFFICIENCY IN ITS USE A project for the country, not a lavish distribution of public money, is what the nation has needed since January 2023. If we were facing a severe recession, with high unemployment and weak demand, some fiscal stimulus wou...

Homemade Demand
BRAZIL ECONOMICS · Report · 05 Jun 2024

First quarter GDP grew 0.8% in seasonally adjusted terms, slightly above the market's average projection (consensus 0.7%) but below our forecast (1.1%). On the supply side it was driven by the surprising expansion of the agricultural sector (11.3%) and, from a demand perspective, by robust growth...

The Central Bank's Herculean Task
BRAZIL ECONOMICS · Report · 03 Jun 2024

The dissent in the last Copom meeting complicated further the work of the Central Bank by accentuating the detachment of inflation expectations from the target in adverse global and domestic scenarios. The favorable reading of IPCA-15, which displayed relatively well-behaved underlying measures, ...

COPOM Watch: "The friendly ghost"
BRAZIL ECONOMICS · Report · 29 May 2024

The finance minister recently complained about the “little ghosts” that are “getting into people's heads and harming our development plan.” Some have interpreted, rightly or wrongly, the minister's statement as a veiled attack on the Central Bank's Focus survey, suggesting that the rise in inf...

Brazil: Risks on The Rise
BRAZIL ECONOMICS · Report · 28 May 2024

During the last couple of months the perception of Brazil's fiscal and monetary risks deteriorated significantly, a trend that has worsened further recently. Last week the government's overly optimistic projection for the primary balance in 2024 once again postponed the inevitable discussion of t...

Extra Caution, Less Cuts
BRAZIL ECONOMICS · Report · 20 May 2024

The current domestic scenario has been characterized by resilient activity, marked by positive surprises at the beginning of the year, and an increasingly tight labor market. In the Copom minutes, the Committee indicates that in this context, combined with the adverse external environment and unm...

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