Friday October 05 2018
Brazil Inflation Rate at 1-1/2-Year High
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Annual inflation rate in Brazil increased to 4.53 percent in September of 2018 from 4.19 percent in August, above market expectations of 4.45 percent. It is the highest inflation rate since March of 2017, mainly driven by higher oil and food prices and reaching the midpoint of the central bank's target range of 4.5 percent +/- 1.5 percent.

Year-on-year, prices rose faster for food and non-alcoholic beverages (2.68 percent compared to 2.15 percent); transport (6.93 percent compared to 5.98 percent in August), namely fuels (17.69 percent compared to 15.13 percent); housing (7.8 percent compared to 7.28 percent), namely electricity (20.37 percent compared to 16.85 percent); and education (5.27 percent comapred to 5.06 percent). On the other hand, inflation eased for clothing and footwear (1.22 percent compared to 1.52 percent); health and personal care (5.39 percent compared to 5.44 percent); household goods (1.07 percent compared to 1.1 percent); and communications (0.41 percent compared to 0.97 percent).

On a monthly basis, consumer prices rose 0.48 percent, rebounding from a 0.09 percent drop in August and above market expectations of a 0.41 percent rise. It is the highest monthly rate for a September month since 2015 when prices went up 0.54 percent. Prices of food and beverages (0.1 percent compared to -0.34 percent in August) and transport (1.69 percent compared to -1.22 percent) rebounded while cost of housing eased slightly (0.37 percent compared to 0.44 percent). Biggest upward pressure came from cost of gasoline (3.94 percent compared to -1.45 percent), ethanol (5.42 percent compared to -4.69 percent), diesel oil (6.91 percent compared to -0.29 percent), air fares (16.81 percent compared to -26.12 percent), fruit (4.42 percent), rice (2.16 percent) and French bread (0.96 percent).




Tuesday October 02 2018
Brazil Trade Surplus Smaller than Expected
MDIC | Gabriela Costa | gabriela.costa@tradingeconomics.com

Brazil trade surplus narrowed to USD 4.97 billion in September of 2018 from USD 5.18 billion in the same month a year earlier and below market expectations of a USD 5.9 billion surplus. Imports increased 4.7 percent mostly due to fuels & lubricants, while exports went up at a slower 3 percent on the back of a surge in crude oil sales.

Imports jumped 4.7 percent year-on-year to USD 14.1 billion, mainly boosted by higher purchases of fuels & lubricants (+18.5 percent), intermediate goods (+4.5 percent) and capital goods (+0.6 percent). On the other hand, purchases fell 3.9 percent for consumption goods. Imports went up from the US (+28.3 percent) and Argentina (+13.1 percent); but fell from China (-10.1 percent) and the EU (-10.2 percent).

Exports increased 3 percent to USD 19.1 billion, mainly due to higher sales of crude oil (+92.7 percent), soybeans (+13.7 percent), soybean meat (+30.7 percent), coffee beans (+11.8 percent), iron ore (+9.7 percent), cellulose (+21.6 percent) and beef (+26.5 percent). Contrarily, sales went down for corn (-34.3 percent), chicken meat (-9.1 percent) and raw sugar (-41.7 percent). Exports of manufactured goods dropped 8.9 percent. Among major trading partners, sales advanced 44.4 percent to China and 17.9 percent to the US, but fell 0.3 percent to the EU.




Friday September 28 2018
Brazil Jobless Rate Below Estimates at 12.1%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment in Brazil fell to 12.1 percent in the three months to August of 2018 from 12.7 percent in the March - May 2018 period, below market consensus of 12.2 percent.

Compared with the three months ended in May 2018, the number of unemployed went down by 549 thousand to 12.707 million. Employment increased by 1,195 thousand to 92.081 million, with main job gains registered in public administration, defense, social security and education (+361 thousand); agriculture, livestock, forestry and fishing (+252 thousand); domestic services (+154 thousand) and industry (+112 thousand). In contrast, job cuts occured only in the transportation and storage sector (-5 thousand). Also, both the private sector (+316 thousand) and the public sector (+233 thousand) added jobs.

The number of people in the labour force rose by 666 thousand to 104.788 million and those detached from the labour force decreased by 25 thousand to 65.388 million.

Compared with the same period of 2017, the number of unemployed fell by 407 thousand from 13.113 million, while employment went up by 1020 thousand from 91.061 million.

The average real income was estimated at BRL 2,225 in the three months to August, almost unchanged from the three months to May but above BRL 2,196 a year earlier.




Thursday September 20 2018
Brazil Holds Interest Rate at 6.50%
Mario | mario@tradingeconomics.com

The Central Bank of Brazil voted unanimously to hold its key Selic rate at 6.50 percent on September 19th 2018 as widely expected, keeping borrowing costs at the lowest level in modern history amid below-target inflation and slightly lower-than-expected growth in Q2.

Policymakers underscored the more gradual economic recovery pace than envisaged early this year. They also mentioned that the global outlook remains challenging, with reduction of risk appetite towards emerging economies. As for inflation risks, the board sees risks in both directions.

The central bank started its easing cycle in October of 2016 after the inflation rate eased from double digits. The annual inflation rate decreased to 4.19 percent in August 2018 from 4.48 percent in July and compared with market expectations of 4.3 percent. It was the lowest inflation rate since May, mainly due to slowing prices of transport and housing.

The economic recovery is still taking longer than initially expected, with recent data affected by strikes. GDP expanded 1.0 percent year-on-year in Q2, easing from a 1.2 percent rise in the previous quarter and missing market expectations of a 1.1 percent increase. It was the slowest expansion since the second quarter of 2017, as exports fell and household spending slowed triggered by May's truckers strike which paralyzed key sectors of the economy. 

The median estimate in the last central bank poll of economists (14 September 2018) currently points to growth of 1.36 percent for 2018 (vs 1.49 percent four weeks ago) and of 2.50 percent for 2019 (unchanged). Analysts expect the Selic rate to end 2018 at 6.50 percent (unchanged).




Thursday September 06 2018
Brazil Inflation Rate Falls More than Expected to 4.19%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The annual inflation rate decreased to 4.19 percent in August 2018 from 4.48 percent in July and compared with market expectations of 4.3 percent. It was the lowest inflation rate since May, mainly due to slowing prices of transport and housing.

Year-on-year, prices rose at a slower pace for: transport (5.98 percent vs 8.94 percent in July); housing (7.28 percent vs 7.41 percent) and clothing and footwear (1.52 percent vs 1.61 percent). In contrast, inflation picked up for: food and beverages (2.15 percent vs 1.40 percent); health and personal care (5.44 percent vs 5.31 percent); education (5.06 percent vs 5.05 percent); houshold goods (1.10 percent vs 0.74 percent) and communications (0.97 percent vs 0.38 percent).

On a monthly basis, consumer prices dropped 0.09 percent, following a 0.33 percent increase in July and against market expectations of a 0.27 percent rise. Cost was mainly pushed down by lower prices of transport (-1.22 percent vs 0.49 percent) and food and beverages (-0.34 percent vs -0.12 percent).


Monday September 03 2018
Brazil Trade Surplus Smallest in 6 Months
MDIC | Stefanie Moya | stefanie.moya@tradingeconomics.com

Brazil trade surplus narrowed to USD 3.78 billion in August of 2018 from USD 5.60 billion in the same month a year earlier and below market expectations of a USD 4.0 billion surplus. It was the smallest trade surplus since February, as imports recorded its highest value since October of 2014 and exports widened.

Imports jumped 35.3 percent year-on-year to USD 18.78 billion. It was the highest value since October of 2014, mainly boosted by higher purchases of consumption goods (+13.7 percent), intermediate (+16.2 percent) and capital goods (+158.2 percent). Imports edged up from China (+89.9 percent), the EU (16.4 percent) and the US (+21.6 percent).

Exports increased 15.8 percent year-on-year to USD 22.55 billion, mostly due to higher sales of soybeans (+43.7 percent), crude oil (+29.3 percent), iron ore (+23 percent), beef (+13.5 percent) and cellulose (+20.1 percent). On the other hand, declines were seen mainly in exports of chicken meat (-7.8 percent), corn (-37.6 percent) and sugar (-48.3 percent). Sales advanced 38.5 percent to China, 20.3 percent to the US and 16.6 percent to the EU.


Friday August 31 2018
Brazil Quarterly GDP Growth Picks Up to 0.2% in Q2
IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Brazilian economy grew by 0.2 percent on quarter in the three months to June 2018, following a downwardly revised 0.1 percent advance in the previous period and slightly beating market expectations of 0.1 percent. The slight expansion was sharply impacted by nationwide truckers strikes in May and June, which led to the first fall in investment in more than a year and the biggest decline in exports since the last quarter of 2014.

The second quarter expansion was driven by public spending (0.5 percent vs -0.3 percent in Q1) and household consumption (0.1 percent vs 0.4 percent). However, fixed investment contracted 1.8 percent, after a 0.3 percent advance in the previous period; and net external demand contributed negatively to the GDP growth as exports slumped 5.5 percent (vs 1.8 percent in Q1) and imports fell at a slower 2.1 percent (vs 0.8 percent in Q1).

From the production side, services output rose by 0.3 percent in the second quarter, following a 0.1 percent increase in the precedent three-month period, boosted by growth in: information & communication services (1.2 percent vs -1.1 percent); real estate activities (1.2 percent vs 0.4 percent); financial & insurance activities (0.7 percent vs -0.2 percent); and other service activities (0.7 percent vs 0.6 percent). By contrast, a contraction was recorded for transport, storage & post (-1.4 percent vs 0.6 percent); trade (-0.3 percent vs 0.1 percent); and public administration, defense, education, health (-0.2 percent vs 0.1 percent).

Meanwhile, industry output shrank 0.6 percent after a 0.1 percent gain in the first quarter, as output declined for both manufacturing (-0.8 percent vs -0.4 percent) and construction (-0.8 percent vs -0.4 percent), while growth was recorded for utilities (0.7 percent vs 2.3 percent) and mining (0.4 percent, the same as in Q1). Agriculture output was unchanged in the second quarter after an increase of 1.3 percent in the previous period.




Friday August 31 2018
Brazil Annual GDP Growth Weakest in 1 Year at 1.0%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The Brazilian gross domestic product advanced by 1.0 percent year-on-year in the second quarter of 2018, easing from a 1.2 percent rise in the previous three-month period and missing market expectations of a 1.1 percent increase. It was the slowest expansion since the second quarter of 2017. Household spending slowed and exports fell due to the truckers' strike that paralyzed key sectors of the economy.

A ten-day nationwide truck strike over fuel prices started on May 21st and disrupted the country's supply chains and ports, leading to shortages of fuel and food and lowering exports.

From the expenditure side, household spending went up 1.7 percent, below 2.8 percent in Q1, posting the lowest increase in a year. Also, net external demand contributed negatively to growth, as exports fell 2.9 percent (6.0 percent in Q1) while imports grew 6.8 percent (7.7 percent in Q1). On the other hand, government spending recovered slightly (0.1 percent compared to -0.8 percent) and fixed investment quickened (3.7 percent compared to 3.5 percent), mainly due to higher production and imports of capital goods.

From the production side, the services sector grew 1.2 percent after rising 1.5 percent in Q1, as output expanded less for trade (1.9 percent from 4.5 percent); transport and storage (1.1 percent from 2.8 percent) and public administration, defense, health, education and social security (0.5 percent from 0.6 percent). Meanwhile, upturns were recorded in information and communication (0.4 percent from -3.3 percent); finance, insurance and related (0.6 percent from 0.1 percent) and real estate activities (3.0 percent vs 2.8 percent). Also, industrial production eased (1.2 percent from 1.6 percent), amid a sharp slowdown in manufacturing activity (1.8 percent from 4.0 percent) and a contraction in the construction sector (-1.1 percent from -2.2 percent). In contrast, output rebounded in mining and quarrying (0.6 percent from -1.9 percent) and advanced faster for utilities (3.1 percent from 0.6 percent). Finally, the agricultural sector shrank at a softer pace (-0.4 percent from -2.6 percent).

On a quarterly basis, the Brazilian economy expanded only 0.2 percent, following a downwardly revised 0.1 percent advance in the previous quarter but above market consensus of a 0.1 percent rise.




Thursday August 30 2018
Brazil Jobless Rate Falls to 12.3% as Expected
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Brazil decreased to 12.3 percent in the three months to July of 2018 from 12.9 percent in the February - April 2018 period, in line with market expectations.

Compared with the three months ended in April 2018, the number of unemployed declined by 545 thousand to 12.868 million. Employment went up by 928 thousand to 91.661 million, with most job gains seen in public administration, defense, social security and education (+451 thousand); industry (+157 thousand) and agriculture, livestock, forestry and fishing (+ 135 thousand). In contrast, job cuts occured only in information, communication, financial services and real estate (-38). In addition, both the private sector (+442 thousand) and the public sector (+284 thousand) added jobs.

The number of people in the labour force rose by 383 thousand to 104.529 million and those detached from the labour force increased by 315 thousand to 65.491 million. 

Compared with the same period of 2017, the number of unemployed fell by 458 thousand from 13.326 million, while employment went up by 983 thousand from 90.677 million.

The average real income was estimated at BRL 2,205 in the three months to July, slightly less than BRL 2,215 in the three months to April but above BRL 2,188 a year ago.


Wednesday August 08 2018
Brazil July Inflation Rate Rises Further to 16-Month High
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Brazil's annual inflation rate increased to 4.48 percent in July 2018 from 4.39 percent in the previous month, slightly above market expectations of 4.4 percent. It was the highest rate since March 2017 mainly due to higher prices of food and transport. Still, the inflation was lower than the 4.53 percent rate seen in mid-July, as the impact of a May nationwide truckers' strike faded.

Year-on-year, prices increased more for food and beverages (1.40 percent vs 1.05 percent in June) and transport (8.94 percent vs 8.78 percent). On the other hand, inflation slowed for housing (7.41 percent vs 7.52 percent); health and personal care (5.31 percent vs 5.63 percent); personal expenses (3.37 percent vs 3.42 percent); clothing (1.61 percent vs 1.80 percent) and education (5.05 percent vs 5.11 percent).

On a monthly basis, consumer prices went up 0.33 percent, following a 1.26 percent rise in June but still above market expectations of a 0.27 percent gain. Prices eased mostly for transport (0.49 percent vs 1.58 percent) and housing (1.54 percent vs 2.48 percent) while declined for food and beverages (-0.12 percent vs 2.03 percent), the category most affected by the strike, as supplies normalized across the country.