Friday June 08 2018
Brazil Inflation Rate Picks Up to 4-Month High of 2.86%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Annual inflation rate in Brazil increased to 2.86 percent in May 2018 from 2.76 percent in April, against market expectations of a small decrease to 2.74 percent. It was the highest inflation rate since January, mainly due to rising prices of transport, namely fuels such as gasoline and diesel. Actually, this situation motivated the nationwide truckers’ strike in the final weeks of May.

Year-on-year, prices continued to advance mainly for transport (6.54 percent vs 5.67 percent in April), namely fuels (19.59 percent vs 16.65 percent) such as gasoline (21.48 percent vs 17.95 percent) and diesel (19.78 percent vs 12.47 percent). Meanwhile, inflation slowed for housing (4.11 percent vs 5.46 percent); health (5.72 percent vs 5.78 percent); personal expenses (3.42 percent vs 3.54 percent); clothing and footwear (2.18 percent vs 2.59 percent). Also, cost fell for food and beverages (-1.46 percent vs -2.11 percent) and articles for the residence (-0.37 percent vs -0.54 percent).

On a monthly basis, consumer prices went up 0.4 percent, after a 0.22 percent increase in April and slightly above market consensus of 0.3 percent. The most significant monthly price rises were recorded for: housing (0.83 percent vs 0.17 percent), mainly due to readjustments in electricity (3.53 percent vs 0.99 percent); transport (0.40 percent after being flat in April), due to higher cost of gasoline (3.34 percent vs 0.26 percent) and diesel (6.16 percent vs 1.84 percent); and food and beverages (0.32 percent vs 0.09 percent), for both consumption at home (0.36 percent vs 0.27 percent) and out of home (0.26 percent vs -0.22 percent).




Friday June 01 2018
Brazil May Trade Surplus Smaller Than Expected
MDIC | Joana Ferreira | joana.ferreira@tradingeconomics.com

Brazil trade surplus narrowed 22 percent from the previous year to USD 5.98 billion in May 2018, a month sharply impacted by nationwide truckers strikes. The trade surplus came in way below market consensus of USD 7.5 billion.

Exports slumped 2.8 percent year-on-year to USD 19.24 billion in May, mainly due to lower sales of manufactured goods (-21 percent) and semi-manufactured goods (-13.6 percent). Meanwhile, exports of primary goods, of which soybeans, rose 13 percent. Among major trading partners, exports dropped to the US (-27.6 percent), the EU (-6 percent), Argentina (-19.3 percent) and Mexico (-28 percent), while those to China jumped 27.2 percent.

On the other hand, imports jumped 9.3 percent to USD 13.26 billion, boosted by higher purchases of intermediate goods (6.5 percent), consumption goods (5.8 percent), fuels and lubricants (17.8 percent) and capital goods (23.5 percent). Imports rose from the EU (16.3 percent), China (10.6 percent), the US (4.6 percent), South Korea (4.8 percent), Japan (25 percent) and Mexico (32 percent), while those from Argentina declined 12.7 percent.

Considering the first five months of the year, the trade surplus fell to USD 26.16 billion from USD 29.03 billion in the same period of 2017.




Wednesday May 30 2018
Brazilian Economy Grows the Least in Near a Year
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The Brazilian gross domestic product advanced by 1.2 percent year-on-year in the first quarter of 2018, compared to a 2.1 percent rise in the previous three-month period and market consensus of a 1.3 percent growth. It was the slowest expansion since the second quarter of 2017, as fixed investment and exports grew less and government spending contracted further.

From the expenditure side, fixed investment rose by 3.5 percent, below 3.8 percent in Q4, mainly reflecting uncertainty about elections scheduled for October; and government spending contracted more (-0.8 percent from -0.4 percent). In addition, net external demand contributed negatively to growth, as imports climbed 7.7 percent (8.1 percent in Q4) and exports increased at a softer 6.0 percent (9.1 percent in Q4). In contrast, household spending expanded faster (2.8 percent from 2.6 percent), posting the strongest rise since the fourth quarter of 2014 (2.8 percent), amid record-low interest rates and lower inflation.

From the production side, the services sector grew 1.5 percent following a 1.7 percent gain in Q4, as output rose less for transport and storage (2.8 percent from 4.4 percent); financial services (0.1 percent from 0.3 percent) and declined for information and communication (-3.3 percent from 1.5 percent). Conversely, gains were recorded in public administration, defense, health, education and social security (0.6 percent from 0.3 percent); trade (4.5 percent from 4.4 percent) and real estate activities (2.8 percent from 2.1 percent). Also, industrial output eased (1.6 percent from 2.7 percent), due to a slowdown in manufacturing activity (4.0 percent from 6.0 percent) and contractions in mining (-1.9 percent from -0.1 percent) and construction (-2.2 percent from -1.6 percent). Meanwhile, the utilities sector expanded faster (0.6 percent, after showing no growth in Q4). Finally, the agricultural sector shrank 2.6 percent, the steepest contraction since a 3.6 percent decline was seen in the third quarter of 2016, compared to a 6.1 percent surge in Q4.

On a quarterly basis, the economy advanced 0.4 percent, following an upwardly revised 0.2 percent expansion in the previous quarter and in line with market expectations. It marks the fifth straight quarter of growth after a 2-year recession in 2016 and 2015.




Wednesday May 30 2018
Brazil GDP Growth at 0.4% in Q1, Matches Forecasts
Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy advanced 0.4 percent on quarter in the first three months of 2018, following an upwardly revised 0.2 percent expansion in the previous quarter and in line with market expectations. It marks the fifth straight quarter of growth after a 2-year recession in 2016 and 2015. Household spending rose slightly faster while investment slowed and public expenditure shrank.

Household spending advanced 0.5 percent, following a 0.1 percent gain in the last three months of 2017. Exports rebounded (1.3 percent compared to -0.8 percent in Q4) and imports rose faster (2.5 percent compared to 1.6 percent). On the other hand, investment increased at a slower 0.6 percent (2.1 percent in Q4) and government spending declined 0.4 percent after a 0.1 percent gain in the previous period. 

Year-on-year, the economy advanced 1.2 percent, well below 2.1 percent in the previous period and market expectations of 1.3 percent. It is the lowest annual growth rate since the second quarter of 2017.




Tuesday May 29 2018
Brazil Jobless Rate Below Forecasts at 12.9%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Brazil increased to 12.9 percent in the three months to April of 2018, compared to 12.2 percent in the November-January 2018 period and market consensus of 13 percent.

Compared with the three months ending in January 2018, the number of unemployed rose by 5.7 percent or 723 thousand to 13.413 million in the three months to April 2018. At the same time, employment fell by 1.1 percent or 969 thousand to 90.733 million, with jobs cuts registered primarily in trade (-439 thousand); construction (-186 thousand); manufacturing (-130 thousand) and agriculture (-127 thousand). In addition, jobs were shed in the private sector without contracts or informal work (-82 thousand) and in the private sector with contracts (-567 thousand) while employment rose in the public sector  (+68 thousand).

The number of people in the labour force went down by 0.2 percent or 245 thousand to 104.146 million and the number of persons detached from the labour force rose by 0.7 percent or 427 thousand to 65.176 million.

Compared with the same period of the previous year, the number of unemployed fell by 4.5 percent or 635 thousand from 14.048 million, while employment grew by 1.7 percent or 1495 thousand from 89.238 million.

The average real income was estimated at BRL 2,182 in the three months to April, below BRL 2,185 in the three months to January but above BRL 2,165 in the three months to April of 2017 period.




Thursday May 17 2018
Brazil Unexpectedly Holds Key Rate
Mario | mario@tradingeconomics.com

The Central Bank of Brazil kept its key Selic rate unchanged at 6.50 percent on 16 May 2018 following a 25-bps slash on 21 March 2018. The hold, unanimously voted, surprised markets who expected a 25bps decline and ended eleven straight cuts, keeping borrowing costs at the lowest in modern history amid below-target inflation and a gradually improving economy, albeit recent setbacks.

Policymakers highlighted that inflation risks remained balanced in both directions, underscoring intensified financial turbulence in emerging markets since the last reunion. Regarding the next meetings, the Committee sees as adequate the maintenance of the interest rate at the current level, contrasting with an easing bias during the previous meeting.

The central bank started its easing cycle in October of 2016 after the inflation rate eased from double digits. Consumer prices increased to 2.76 percent year-on-year in April of 2018 from 2.68 percent in March and compared to market expectations of 2.82 percent. Considering the first four months of 2018, the cumulative inflation was 0.9 percent, the lowest for an April month since the real was implemented in 1994.

The economic recovery is still taking longer than initially expected, with some recent setbacks. The IBC-Br index of economic activity in Brazil shrank 0.74 percent month-over-month in March of 2018, after a revised 0.10 percent slump in February. It was the steepest decline in economic activity since December of 2016 (-0.78 percent). Year-on-year, the Brazilian economy contracted 0.66 percent on a non-seasonally adjusted basis, the most in near a year, after growing 0.51 percent in the previous month. Meanwhile, industrial output grew 1.30 percent year-on-year in March of 2018, following a downwardly revised 2.4 percent rise in February. It is the smallest gain in industrial output since June 2017 when it grew 0.8 percent.

The median estimate in the last central bank poll of economists (11 May 2018) currently points to growth of 2.51 percent for 2018 (vs 2.76 percent four weeks ago) and of 3.00 percent for 2019 (unchanged). Analysts expect the Selic rate to end 2018 at 6.25 percent (unchanged). 




Thursday May 10 2018
Brazil April Inflation Rate Ticks Up to 2.76%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Inflation rate in Brazil increased to 2.76 percent year-on-year in April of 2018 from 2.68 percent in March and compared to market expectations of 2.82 percent. Still, the inflation rate remained far below the central bank target of 4.5 percent ± 1.5 p.p. Prices rose faster for transport, housing and personal expenses while grew at a slower pace for health and food. Considering the first four months of 2018, the cumulative inflation was 0.9 percent, the lowest for an April month since the real was implemented in 1994.

Year-on-year, inflation picked up for transport (5.67 percent vs 5.60 percent in March); housing (5.46 percent vs 4.13 percent) and personal expenses (3.54 percent vs 3.51 percent). On the other hand, prices slowed for health (5.78 percent vs 5.88 percent) and fell for food and non-alcoholic beverages (-2.11 percent vs -1.64 percent) and articles for the residence (-0.54 percent vs -1.03 percent).

On a monthly basis, consumer prices were up 0.22 percent, compared to a 0.09 percent increase in March and market estimates of a 0.28 percent rise. The biggest upward pressure stemmed from monthly cost of health and personal care (0.91 percent vs 0.48 percent), mainly due to medicines (1.52 percent) and health insurance (1.06 percent). Also, prices rose faster for clothing (0.62 percent vs 0.33 percent), especially for women (1.66 percent); articles for the residence (0.22 percent vs 0.08 percent), of which household appliances (0.42 percent); and personal expenses (0.12 percent vs 0.05 percent). Meantime, cost was flat for transport (from -0.25 percent in March), as increases in prices of car repair (1.31 percent) and gasoline (0.26 percent) offset declines in those of ethanol (-2.73 percent) and airline tickets (-2.67 percent). Housing prices increased 0.17 percent, slightly below 0.19 percent in March.



Thursday May 03 2018
Brazil Trade Surplus Below Expectations in April
MDIC | Stefanie Moya | stefanie.moya@tradingeconomics.com

Brazil trade surplus narrowed to USD 6.14 billion in April of 2018 from USD 6.97 billion in the same month a year earlier and below market consensus of a USD 6.3 billion surplus. Imports increased 28.7 percent year-on-year to USD 13.79 billion while exports rose 12.7 percent to USD 19.93 billion compared to April of 2017. However, when adjusted for the working day average, exports dropped 3.4 percent while imports jumped 10.3 percent.

When adjusted for the working day average, imports rose 10.3 percent year-on-year, boosted by purchases of capital goods (36.2 percent); consumption goods (12.2 percent); intermediate goods (6.3 percent) and fuels and lubricants (6.3 percent). Among the most important import partners purchases advanced from: Central America and the Caribbean (+39.5 percent); the US (+18.8 percent); Argentina (+19 percent) and the UE (+18.3 percent). 

Exports declined 3.4 percent compared to April of 2017, mainly due to lower sales of manufactured goods (-4 percent), namely passenger vehicles (-24.6 percent), aircraft (-4.9 percent) and cargo vehicles (-2.7 percent); primary goods (-2.9 percent), namely soybeans (-10.7 percent), iron ore (-21.5 percent) and chicken meat (-9.5 percent); semimanufactured goods (-2.7 percent), namely sugar (-57.4 percent), gold (-7.3 percent) and leather goods (-27.4 percent). Exports went down to China (-7.7 percent) and the US (-8.6 percent) but rose to Argentina (+4.6 percent). 

Considering the first four months of the year, imports advanced 14.5 percent to USD 54.21 billion and exports rose 7.7 percent to USD 74.30 billion.


Friday April 27 2018
Brazil Jobless Rate at Near 1-Year High in March
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Brazil increased to 13.1 percent in the three months to March of 2018, above 12.6 percent in the December to February 2018 period and market estimates of 12.9 percent. It was the third straight increase in jobless rate and the highest since the three months to May 2017 period.

Compared to the last quarter of 2017, the number of unemployed climbed by 11.2 percent or 1379 thousand to 13.689 million in the three months to March 2018. Meantime, employment fell by 1.7 percent or 1528 thousand to 90.581 million, with job cuts reported mostly in trade (-396 thousand); construction (-389 thousand); manufacturing (-327 thousand) and public administration (-267 thousand). Also, jobs continued to be shed in the private sector without contracts or informal work (-402 thousand); in the private sector with contracts (-408 thousand) and in the public sector (-255 thousand).

The number of people in the labour force decreased by 0.1 percent or 149 thousand to 104.270 million and the number of persons detached from the labour force went up by 0.4 percent or 233 thousand to 64.868 million.

Compared with the same period of the previous year, the number of unemployed fell by 3.4 percent or 487 thousand from 14.176 million, while employment grew by 1.8 percent or 1634 thousand from 88.947 million.

The average real income was estimated at BRL 2,169 in the three months to March, lower than BRL 2,173 in the three months to December and the same as in the three months to March of 2017 period.



Tuesday April 10 2018
Brazil Inflation Rate at 6-Month Low
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil increased 2.68 percent year-on-year in March of 2018, below 2.84 percent in February and compared to market expectations of 2.71 percent. It is the lowest inflation rate since September, remaining below the central bank target of 4.5 percent ± 1.5 p.p. Considering the first three months of 2018, the cumulative inflation was 0.7 percent, the lowest since the real was implemented in 1994.

Year-on-year, prices decreased for food and non-alcoholic beverages (-1.63 percent) and articles for the residence (-1.03 percent). Increases were seen mostly in prices of transport (5.6 percent), housing (4.13 percent), health care (5.88 percent) and personal expenses (3.51 percent).

On a monthly basis, prices rose a meager 0.09 percent, below 0.32 percent in February and expectations of 0.12 percent. The biggest downward pressure came from transport cost (-0.25 percent compared to +0.74 percent in February), mainly due to a 15.42 percent slump in airline tickets. Communication prices declined 0.33 percent, following a 0.05 percent gain. On the other hand, the biggest upward impact came from health and personal care (prices up 0.48 percent after a 0.38 percent rise), mainly due to health insurance (1.06 percent). Housing cost increased 0.19 percent, slightly below 0.22 percent in February.