Friday January 10 2020
Brazil Inflation Rate Jumps to 7-Month High
IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com

Brazil's consumer price inflation rose to 4.31 percent year-on-year in December 2019 from 3.27 percent in the previous month and above market expectations of 4.23 percent. That was the highest rate since May.

Main upward pressure came from food & beverages (6.37 percent vs 3.35 percent in November), transport (3.57 percent vs 1.45 percent), health (5.41 percent vs 5.30 percent), personal expenses (4.67 percent vs 4.02 percent), and communication (1.07 percent vs 0.41 percent).

Meanwhile, inflation slowed for housing (3.90 percent vs 4.60 percent), clothing (0.74 percent vs 1.89 percent), and education (4.75 percent vs 4.77 percent).

On a monthly basis, consumer prices climbed 1.15 percent, the highest rate for a December month since 2002, mainly boosted by food & beverages (3.38 percent vs 0.72 percent), in particular meat (18.06 percent), whole chicken (5.08 percent) and fish (2.37 percent); transport (1.54 percent vs 0.30 percent) due to fuels (3.57 percent) such as gasoline (3.36 percent) and ethanol (5.50 percent); and personal expenses (0.92 percent vs 1.24 percent) on the back of high gambling (12.88 percent).

Considering 2019 full year, the average inflation picked up to 4.31 percent from 3.75 percent in 2018.




Thursday January 02 2020
Brazil Trade Surplus Narrows in December
Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Brazil’s trade surplus decreased to USD 5.600 billion in December 2019 from USD 6.428 billion in the same month of the previous year but above market expectations of a USD 4.352 billion surplus. Exports fell much faster than imports.

Exports from Brazil slumped 6.2 percent from a year earlier to USD 18.16 billion in December 2019, dragged down by lower shipments of manufactured goods (-13.6 percent), mostly fuels (-14.6 percent); aluminum oxides/hydroxides (-20.6 percent); motor engines and parts (-6.9 percent) and auto parts (-22.7 percent). Also, sales decreased for semi-manufactured products (-21.2 percent), namely cellulose (-43.1 percent); raw sugar (-10.2 percent) and iron & steel (-27.1 percent). In contrast, those of primary goods rose (3.3 percent), in particular crude oil (48.2 percent); beef (55.5 percent); corn (20.2 percent) and chicken meat (11.7 percent). However, significant declines were observed in exports of iron ore (-18.8 percent) and soybeans (-20 percent). 

Among major trading partners, overseas sales went down to ASEAN countries (-22.2 percent) and the EU (-30.4 percent), but increased to China (4.1 percent), the US (5.3 percent) and Argentina (0.6 percent).

Imports to Brazil went down 2.8 percent year-on-year to USD 12.56 billion, as purchases fell for capital goods (-11.8 percent); consumption goods (-3.3 percent) and fuels & lubricants (-6.2 percent). Conversely, acquisitions of intermediate goods grew (1.6 percent). 

Among major trading partners, imports decreased from the US (-20.2 percent) and Argentina (-6.4 percent), while they rose from China (21.6 percent), ASEAN countries (12.3 percent) and the EU (6.4 percent).

Considering the full year of 2019, the country's trade surplus shrank to USD 46.67 billion from USD 58 billion in the same period a year ago, with shipments and purchases falling 6.4 percent and 2.1 percent, respectively. It was the smallest annual trade surplus since 2015.




Friday December 27 2019
Brazil Jobless Rate Lowest Since 2016
IBGE | Rafael Gonzalez | rafael.gonzalez@tradingeconomics.com

The unemployment rate in Brazil declined to 11.2 percent in the three months to November of 2019 from 11.6 percent in the three months to October and 11.6 percent a year earlier. It was the lowest jobless rate since the three months to May 2016, and below market expectations of 11.4 percent as more temporary jobs were created in the retail to face the end-of-year holidays.

The labor force participation rate edged down to 62.0 percent from 62.1 percent in the previous period while the employment rate increased by 0.2 percentage points to 55.1 percent.

The number of unemployed declined by 702 thousand from the previous period, or 5.6 percent, to 11.9 million while employment rose by 785 thousand, or 0.8 percent, to 94.4 million

The number of people in the labour force was 106.3 million, unchanged from the previous period.

The average real income was estimated at BRL 2,332 in the three months to November, the same as in the three months to October. 




Thursday December 12 2019
Brazil Trims Interest Rate for 4th Straight Meeting
Banco Central do Brasil | Mario | mario@tradingeconomics.com

The Central Bank of Brazil voted unanimously to trim its key Selic rate by 50 bps to 4.50 percent during its December meeting. It was the fourth consecutive rate cut bringing borrowing costs to its lowest on record, amid the global economic slowdown and a recovery in the domestic economy. Policymakers said that the the current stage of the business cycle needs caution in the conduct of monetary policy and added that next decisions will be data dependent.

The Committee underscored once again that data on economic activity since the previous Copom meeting suggest resumption of the process of economic recovery. However, they expect this to occur at a gradual pace, and that risks of a global slowdown persist amid an uncertain outlook. Policymakers emphasizes that risks around its baseline scenario remain in both directions. On the one hand, the high level of economic slack may continue to produce lower-than-expected prospective inflation trajectory. The Committee added that the decision reflects its baseline scenario for prospective inflation and the associated balance of risks, and it is consistent with convergence of inflation to target over the relevant horizon for the conduct of monetary policy. 

The Copom mentioned that the next steps in the conduct of monetary policy will continue to depend on the evolution of economic activity, the balance of risks, and on inflation projections and expectations.

The central bank started its easing cycle in October of 2016 after the inflation rate eased from double digits. The inflation rate finished 2018 within the central bank target of 4.5 percent plus or minus 1.5 percentage points and above 2.95 percent in 2017. It currently remains on target, as the annual inflation rate jumped to 3.27 percent in November 2019 from 2.54 percent in the previous month and above market expectations of a 3.23 percent gain. 

The recovery is still taking longer than initially expected. GDP expanded only 1.0 percent year-on-year in the second quarter of 2019, while industrial production in decreased 2.30 percent in August of 2019 over the same month in the previous year, falling for the third straight month. The latest central bank’s Focus survey of market expectations revised higher the GDP growth forecasts for 2019 to 1.10 percent from 0.92 percent four weeks ago.




Friday December 06 2019
Brazil November Inflation Rate Rises to 3-Month High
IBGE | Stefanie Moya | stefanie.moya@tradingeconomics.com

The annual inflation rate in Brazil rose to 3.27 percent in November 2019 from 2.54 percent in the previous month and above market expectations of a 3.23 percent gain. Prices increased further boosted by food & non-alcoholic beverages and transportation.

Year-on-year, prices advanced at a faster pace for food and beverages (3.35 percent from 3.01 percent in October); transport (1.45 percent from 0.4 percent); housing (4.60 percent from 3.13 percent), namely electricity (7.51 percent from 0.99 percent); health (5.3 percent from 4.34 percent); personal expenses (4.02 percent from 3.13 percent); clothing (1.89 percent from 1.1 percent); education (4.77 percent from 4.72 percent); and communication (0.41 percent from 0.35 percent).

On the other hand, cost of household goods slowed to 0.69 percent from 1.53 percent in October. 

On a monthly basis, consumer prices went up 0.51 percent, after a 0.1 percent gain in the prior month and compared with market forecasts of a 0.46 percent rise. It was the biggest gain for a November month since 2015, as prices increased further for food and beverages (0.72 percent from 0.05 percent in October), namely meat (+8.09 percent); personal expenses (1.24 percent from 0.20 percent), driven by gambling (+24.35 percent) due to readjustments in betting prices effective from November 10th; and education (0.08 percent from 0.03 percent). In addition, cost of housing rebounded (0.71 percent from -0.61 percent), boosted by electricity (+2.15 percent). Meanwhile, prices eased for transport (0.3 percent from 0.45 percent); and clothing (0.35 percent from 0.63 percent).


Tuesday December 03 2019
Brazilian Economy Expands the Most in Over a Year
IBGE | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Brazilian economy advanced 0.6 percent on quarter in the three months to September 2019, following an upwardly revised 0.5 percent expansion in the previous period and beating market expectations of 0.4 percent. It was the strongest growth rate since the first quarter of 2018, as industrial and services activities expanded further and the agricultural sector recovered.

On the production side, the industrial sector grew 0.8 percent, faster than a 0.7 percent expansion in the second quarter of the year, boosted by mining (12 percent vs -3.1 percent in Q2). Also, utilities shrank 0.9 percent, less than a 1.1 percent contraction in the prior period. Meanwhile, manufacturing output fell 1 percent, after rising 1.8 percent; and construction output growth slowed to 1.3 percent from 2.4 percent in Q2. 

The services sector advanced 0.4 percent, higher than a 0.2 percent growth, mainly driven by financial services (1.2 percent vs -0.4 percent), trade (1.1 percent vs 0.7 percent), and information & communication (1.1 percent vs 0.7 percent). In addition, transportation declined 0.1 percent, less than a 0.2 percent fall in the second quarter. On the other hand, public admininstration, health, social security & education contracted 0.6 percent, following a 0.3 percent decrease; and real estate activities grew 0.3 percent, easing from a 0.8 percent expansion in the previous period.

Agriculture expanded 1.3 percent, rebounding from a 0.5 percent contraction in the prior quarter.

On the expenditure side, household spending increased 0.8 percent, higher than a 0.2 percent rise in the three months to June. Meantime, gross fixed capital formation rose 2 percent, less than a 3 percent gain in Q2; and government expenditure fell 0.4 percent, faster than a 0.3 percent decline. Exports dropped 2.8 percent (vs -2 percent in Q2) while imports went up 2.9 percent (vs 0.7 percent in Q2).

On a yearly basis, the economy grew 1.2 percent, more than a 1.1 percent expansion in the previous period and also above market forecasts of 1 percent.




Tuesday December 03 2019
Brazil GDP Annual Growth Beats Expectations
IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Brazilian economy expanded 1.2 percent year-on-year in the third quarter of 2019, following a revised 1.1 percent growth in the previous period and beating market consensus of 1.0 percent.

On the production side, industrial output grew 1.0 percent during the third quarter (vs 0.3 percent in Q2), led by construction (4.4 percent vs 2.4 percent), mining and quarrying (4.0 percent vs -9.3 percent) and utilities (1.6 percent vs 2.2 percent). By contrast, manufacturing output shrank 0.5 percent, compared to 1.4 percent growth in the previous three-month period, due to lower production of metals, cellulose and paper, chemicals and pharmaceuticals.

The service sector also advanced 1.0 percent (vs 1.2 percent in Q2) mainly boosted by information and communication (4.2 percent vs 3.3 percent), wholesale and retail trade (2.4 percent vs 2.0 percent), real estate activities (1.9 percent vs 2.6 percent), and financial, insurance and related services activities (1.3 percent vs -1.0 percent). Meanwhile, there was a contraction in transport and storage (-1.0 percent vs 0.4 percent), and public health, education and social security (-0.6 percent vs 0.0 percent).

Also, agriculture activities expanded 2.1 percent, following a 1.4 percent increase in the second quarter, due to cotton, corn and orange output.

On the expenditure side, household expenditure rose 1.9 percent (vs 1.8 percent in Q2) and fixed investment climbed 2.9 percent (vs 5.4 percent in Q2). Meanwhile, government spending continued to contract (-1.4 percent vs -0.7 percent). Also, net external demand contributed negatively to GDP growth, as exports plunged 5.5 percent (vs 1.3 percent in Q2) while imports were up 2.2 percent (vs 4.9 percent in Q2).

On a quarterly basis, the economy grew 0.6 percent in the third quarter, following an upwardly revised 0.5 percent expansion in the previous period and beating market expectations of 0.4 percent.




Monday December 02 2019
Brazil Trade Surplus Shrinks in November
MDIC | Agna Gabriel | agna.gabriel@tradingeconomics.com

Brazil’s trade surplus narrowed to USD 3.428 billion in November 2019 from USD 4.076 billion in the same month last year but above market expectations of USD 3.365 billion. Both, imports and exports dropped 16 percent from a year earlier. This comes after the US President Donald Trump announced today that he will reimpose steel and aluminium tariffs on the country.

Exports slumped 16 percent from a year earlier to USD 17.60 billion in November, amid lower sales of primary goods (-9.5 percent), such as crude oil (-46.1 percent), coffee grains (-21 percent), copper ore (-10.8 percent), iron ore (-4.7 percent and soybeans (-2.6 percent). Also, shipments of semi-manufacture products tumbled 9.2 percent, on the back of cellulose (-20.6 percent) and iron and steel (-21.7 percent); and those of manufactured products dropped 25.6 percent mainly due to fuel (-39.7 percent) and motor vehicles and parts (-26.1 percent). 

Among major trading partners, exports went down to China (-11 percent), the EU (-41.4 percent), the US (-4.7 percent) and Argentina (-25.5 percent). 

Also, imports fell 16 percent year-on-year to USD 14.17 billion, dragged by purchases of intermediate goods (-9.7 percent) and capital goods (-54.2 percent). On the other hand, imports rose for fuels & lubricants (16.4 percent) and consumption goods (0.3 percent). 

Among major trading partners, imports dropped from the EU (-2.3 percent), China (-5.3 percent), the US (-0.8 percent), Argentina (-8.1 percent) and ASEAN countries (-18.5 percent). 

Considering January to November, the country's trade surplus shrank to USD 41.08 billion from USD 51.61 billion in the same period a year earlier. 


Friday November 29 2019
Brazil Jobless Rate Drops to 11.6% as Expected
IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com

The unemployment rate in Brazil fell to 11.6 percent in the three months to October 2019 from 11.8 percent in the May to July period, in line with market consensus. The number of unemployed declined by 1.6 percent while employment rose by 0.5 percent. The labor force participation rate was unchanged at 62.1 percent while the employment rate increased by 0.2 percentage points to 54.9 percent.

The number of unemployed declined by 202 thousand from the previous period, or 1.6 percent, to 12.367 million.

Employment rose by 470 thousand, or 0.5 percent, to 94.055 million, with most of job gains recorded in trade (+204 thousand); construction (+197 thousand); hotels and restaurants (+124 thousand); industry (+75 thousand); domestic services (+50 thousand); transportation, warehousing and mail (+28 thousand); public administration, defense, social security and education (+23 thousand); and information and communication activities, finance, real estate, professional and administrative activities (+11 thousand). Meanwhile, job losses were registered in agriculture, livestock, forestry, fishery and aquaculture (-199 thousand) and other services (-35 thousand).

The number of people in the labour force went up by 268 thousand to 106.421 million and those detached from the labour force increased by 37 thousand to 64.860 million.

The average real income was estimated at BRL 2,317 in the three months to October, compared to BRL 2,292 in the three months to July.


Thursday November 07 2019
Brazil Inflation Rate at 2-Year Low
Joana Taborda | joana.taborda@tradingeconomics.com

Annual inflation rate in Brazil fell for the second straight month to 2.54 percent in October of 2019 from 2.89 percent in September and compared with market expectations of 2.52 percent. It is the lowest inflation rate since September of 2017. On a monthly basis, consumer prices edged up 0.1 percent after being nearly flat in the previous period, mainly due to higher cost for fuels, airline tickets and clothing.

Year-on-year, prices eased for food and non-alcoholic beverages (3.01 percent compared to 3.56 percent in September); transport (0.4 percent compared to 0.87 percent); housing (3.13 percent compared to 3.91 percent), namely electricity (0.99 percent compared to 4.48 percent); personal expenses (3.13 percent compared to 3.17 percent); household goods (1.53 percent compared to 2.39 percent); education (4.72 percent compared to 4.74 percent); and communication (0.35 percent compared to 0.39 percent).

In contrast, cost advanced further for clothing (1.1 percent compared to 0.8 percent) and health (4.34 percent compared to 4.2 percent).

On a monthly basis, the biggest upward pressures came from transport (prices up 0.45 percent after being flat in September), mainly due to fuels (1.38 percent), namely gasoline (1.28 percent) and ethanol (1.9 percent) and airline tickets (1.93 percent after two straight months of falls). Prices also increased faster in October for clothing (0.63 percent compared to 0.27 percent) and personal expenses (0.2 percent compared to 0.04 percent). Also, cost of food and beverages was nearly fat after falling 0.43 percent in September. On the other hand, housing prices fell 0.61 percent after being unchanged in the previous month, mainly due to a 3.22 percent drop in electricity cost amid lower fees.