Wednesday January 10 2018
Brazil 2017 Inflation Rate Lowest Since 1998
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil increased 2.95 percent year-on-year in December of 2017, following a 2.8 percent rise in November. Figures came above market expectations of 2.8 percent, reaching the highest inflation in six months. Still, the cumulative inflation for 2017 was 2.95 percent compared to 6.29 percent in 2016. It is the lowest reading since 1998 and below the central bank target of 4.5 percent ± 1.5 p.p.

Year-on-year, prices rose faster mainly for housing (6.26 percent compared to 6.05 percent in November) and transport (4.1 percent compared to 3.98 percent). On the other hand, food cost continued to fall (-1.87 percent compared to -2.3 percent). 

On a monthly basis, consumer prices increased 0.44 percent, above 0.28 percent in November and forecasts of 0.3 percent. It is the highest monthly rate since August of 2016, mainly due to a 1.23 percent jump in transport prices, namely air fares (22.28 percent), gasoline (2.26 percent) and ethanol (4.37 percent). Cost of food and non-alcoholic beverages went up 0.54 percent and made the second largest upward pressure, namely meat (1.67 percent), fruit (1.33 percent), chicken (2.04 percent) and French bread (0.67 percent).




Tuesday January 02 2018
Brazil Trade Surplus Rises in December
MDIC | Joana Taborda | joana.taborda@tradingeconomics.com

Brazil trade surplus increased to USD 4.997 billion in December of 2017 from a USD 4.42 billion surplus in the corresponding month a year ago, beating market expectations of USD 4.06 billion. Considering full 2017, the country's trade surplus widened 41 percent from 2016 to USD 67 billion.

Exports jumped 10.4 percent year-on-year to USD 17.59 billion, boosted by sales of crude oil (+87.3 percent to USD 1.2 billion); soybeans (+267.9 percent to USD 913 million); corn (+297.1 percent to USD 621 million); beef (+40.3 percent to USD 467 million); chicken meat (+2.9 percent to USD 467 million); semimanufactured of iron and steel (+77.9 percent to USD 439 million) and raw cotton (+119.5 percent to USD 227 million).

Imports went up 9.3 percent year-on-year to USD 12.59 billion, mainly due to purchases of fuels and lubricants (+61.4 percent), namely diesel oil, gasoline, crude oil, cokes, electricity, natural gas, coal;  intermediate goods (+16.5 percent), namely naphtha for petrochemicals, copper sulfide ores, potassium chloride, integrated circuits, copper cathodes, iron/steel laminates, digital memories, ethylene copolymers, gearboxes, telephony apparatus, sodium hydroxide; capital goods (+14.7 percent), namely LED bulbs, electronic regulators, railway vehicles, cargo vehicles, data processing machines, airplanes, industrial robots, terminal equipment or repeaters, gas/smoke analyzers, machining centers, load lifting machines; and consumer goods (+13.6 percent), namely medicines, passenger cars, immunological products, whiskeys, cologne, blood fractions, immunoglobulin, preparations for animal feed, olive oil, video consoles, fungicide, wines, confections.

Considering full 2017, the country's trade surplus widened 41 percent from 2016 to USD 67 billion. Adjusted for the daily average, exports went up 18.5 percent to USD 217.75 billion and imports increased 10.5 percent to USD 150.75 billion. Main export partners were China (USD 50.2 billion); the US (USD 26.9 billion); Argentina (USD 17.6 billion); Netherlands (USD 9.3 billion) and Japan (USD 5.3 billion). Imports came mainly from China (USD 27.9 billion); the US (USD 24.8 billion); Argentina (USD 9.4 billion); Germany (USD 9.4 billion) and South Korea (USD 5.3 billion).




Friday December 29 2017
Brazil Jobless Rate Drops to 11-Month Low of 12%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Brazil fell to 12 percent in the three months to November of 2017 compared to 12.2 percent in the previous period and matching market expectations. It is the lowest rate since the last quarter of 2016. After touching a record high of 13.7 percent in March, the jobless rate has been steady falling mostly due to a rise in informal employment.

Compared with the three months to August, the number of unemployed declined by 4.1 percent or 543 thousand to 12.6 million and employment went up by 1 percent or 887 thousand to 91.9 million. Job gains occured mostly in trade (+1.3 percent or 223 thousand); information, communication, financial and real estate activities (+2.2 percent or 219 thousand) and domestic services (+3.5 percent or 214 thousand). 

The number of people in the labour force went up by 345 thousand to 104.3 million and the number of those detached from the labour force were unchanged at 64.5 million. 

The average real income received in all jobs by employed persons was estimated at BRL 2,142 in the November quarter, higher than BRL 2,122 in the three months to August and BRL 2,087 in the period ended November 2016.




Friday December 08 2017
Brazil Inflation Rate Lower than Expected in November
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil increased 2.8 percent year-on-year in November of 2017, the most since June but below market expectations of 2.88 percent. The inflation rate had been on the upward trend since August when it touched 2.46 percent, the lowest since 1999.

Year-on-year, prices rose faster mainly for housing (6.05 percent compared to 5 percent in October) and transport (3.98 percent compared to 3.73 percent). In contrast, food prices declined further by 2.3 percent from 2.1 percent.

The cumulative inflation for the first eleven months of the year stands at 2.5 percent, well below 5.97 percent in the same period of 2016, making it likely that full-year inflation will drop below the official target of 4.5 percent for the first time in two decades.

On a monthly basis, consumer prices increased 0.28 percent, below 0.42 percent in October and market expectations of 0.35 percent. A slowdown was seen in cost of housing (1.27 percent compared to 1.33 percent) and clothing (0.1 percent compared to 0.71 percent). Also, cost of food and beverages dropped more (-0.38 percent compared to -0.05 percent), namely cassava flour (-4.78 percent); tomatoes (-4.64 percent); fruit (-2.09 percent), French bread (-0.55 percent) and meat (-0.11 percent); and articles for residence (-0.45 percent compared to -0.39 percent). On the other hand, prices rose faster for transport (0.52 percent compared to 0.49 percent), namely gasoline (2.92 percent) and ethanol (4.14 percent) and personal expenses (0.42 percent compared to 0.32 percent). 


Thursday December 07 2017
Brazil Slashes Key Rate to Record Low
Mario | mario@tradingeconomics.com

The Central Bank of Brazil slashed its key Selic rate by 50 basis points to 7.00 percent on December 6th of 2017 following a 75-bps trim on October 25th of 2017. The cut, widely anticipated and unanimous, was the tenth straight, bringing borrowing costs to the lowest in modern history amid plunging inflation and a slow recovery.

The statement underscored that the global outlook has been favorable; the baseline inflation scenario has evolved as expected and that expectations have adjusted downwardly; and the balance of risks involves risks in both directions, with possible second-round effects of the favorable food price shock and of low current levels of industrial goods mentioned in first place. Regarding the next meeting, at this time the Copom views an additional moderate reduction of the pace of easing as appropriate. 

The central bank started its easing cycle in October of 2016 after the inflation rate eased from double digits. Consumer prices increased 2.7 percent year-on-year in October of 2017, above 2.54 percent in September and compared to market expectations of 2.75 percent, mainly due to rising electricity cost. Inflation went up for the second month after touching 2.46 percent in August, the lowest since 1999.

The economic recovery is still taking longer than initially expected, albeit recent improvements seen lately. Industrial production rose 5.3 percent year-on-year in October of 2017, compared to a downwardly revised 2.5 percent increase in the previous month. It was the sixth consecutive expansion and the highest since April of 2013. Also, the employment rate increased to 54.20 percent in October from 54.10 percent in September of 2017, linking its seventh straight monthly improvement. 

The median estimate in a central bank poll of economists currently (December 1st of 2017) points to growth of 0.89 percent in 2017 (vs 0.73 in the previous meeting) and 2.60 percent in 2018 (vs 2.50 percent). Analysts expect the Selic rate to end 2017 at 7.00 percent (vs 7.00 percent).




Monday December 04 2017
Brazil Trade Surplus Narrows 25.5% YoY in November
MDIC | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Brazil trade surplus decreased to USD 3.55 billion in November of 2017 from a USD 4.76 billion surplus in the corresponding month a year ago and below market expectations of USD 5.25 billion. Imports jumped 14.7 percent to USD 13.14 billion while exports advanced at a much slower 2.9 percent to USD 16.69 billion, the lowest gain in 11 months.

Imports surged 14.7 percent year-on-year to USD 13.14 billion, following an 20.2 percent rise in October. Purchases were mainly boosted by fuels and lubricants (69.2 percent); namely diesel, coal, gasoline, crude oil, cokes, electric power; lubricating oils, petroleum oils, liquefied butanes and kerosene. Also, imports grew for consumer goods (20.0 percent); capital goods (10.8 percent) and intermediate goods (6.7 percent). Among major trading partners, imports rose from China (24.4 percent), the EU (15.9 percent) and the US (0.9 percent).

Exports rose 2.9 percent to USD 16.69 billion, following a 37.6 percent jump in the prior month. It was the lowest increase since December last year when sales shrank 5 percent. Exports went up 26.5 percent for basic products, mainly soy beans (522.8 percent); corn grain (243.5 percent); raw cotton (74.9 percent); beef cattle (47.4 percent); copper ore (30.3 percent); soybean meal (24 percent); iron ore (23.4 percent); leaf tobacco (10.8 percent) and chicken meat (8.8 percent). Also, sales rose for semimanufactured goods (3.1 percent), mostly copper cathodes (192.4 percent); cast iron (87.9 percent); semimanufactured iron and steel (44 percent) and lumber (32.2 percent). Meanwhile those for manufactured goods fell (-14.2 percent). Among major trading partners, exports increased to China (40.7 percent), the EU (3.7 percent), the US (9.6 percent) and Argentina (30.6 percent). 

In the first eleven months of the year, the trade surplus widened by 43.3 percent to a record-high of USD 62 billion, as exports climbed 18.2 percent and imports rose at a slower 9.6 percent.


Friday December 01 2017
Brazil GDP Growth Strongest in 3 Years
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy expanded 1.4 percent year-on-year in the third quarter of 2017, following an upwardly revised 0.4 percent rise in the previous quarter and better than forecasts of 1.3 percent. It is the fastest growth rate since the first quarter of 2014, boosted by a jump in household spending and exports.

Household spending surged 2.2 percent, after a 0.6 percent rise in the previous period, hitting the highest growth rate since the last three months of 2014. On the other hand, public expenditure (-0.6 percent compared to -0.8 percent) and investment (-0.5 percent compared to -6.7 percent) continued to fall although at a slower pace. Exports jumped 7.6 percent (2.5 percent in Q2) and imports recovered (5.7 percent compared to -3.2 percent). 

On the production side, both services (1 percent compared to -0.2 percent) and industry (0.4 percent compared to -1.9 percent) rebounded while agriculture slowed (9.1 percent compared to 14.8 percent).

On a quarterly basis, the economy advanced a meager 0.1 percent, following an upwardly revised 0.7 percent growth in the previous period and below market expectations of 0.3 percent. Still, it was the third consecutive expansion after 2 year long recession.




Friday December 01 2017
Brazil GDP Grows a Meager 0.1% in Q3
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy advanced 0.1 percent on quarter in the third quarter of 2017, following an upwardly revised 0.7 percent growth in the previous period and below market expectations of 0.3 percent. It is the smallest expansion in three quarters after a 2-year recession.

Household spending rose 1.2 percent, the same as in the previous period and gross fixed capital formation went up 1.6 percent, the most in four years after stalling in the previous quarter. On the other hand, government spending shrank 0.2 percent, following a 0.1 percent fall in the previous period. Exports rose 4.1 percent (1.2 percent in Q2) and imports jumped 6.6 percent, recovering from a 3.4 percent fall in the previous period. 

On the production side, the industrial sector recovered (0.8 percent compared to -0.4 percent) mainly due to a rebound in utilities (0.1 percent compared to -2 percent); mining (0.2 percent compared to -0.2 percent) and manufacturing (1.4 percent compared to 0.2 percent) while construction stalled (-1.9 percent in Q2). Services rose slightly less (0.6 percent compared to 0.8 percent), namely internal trade (1.6 percent compared to 2.2 percent) and agriculture shrank 3 percent (-2.3 percent).

Growth figures for Q2 2017 were revised up to 0.7 percent from 0.2 percent and for Q1 2017 to 1.3 percent from 1 percent. 

Year-on-year, the economy advanced 1.4 percent, following an upwardly revised 0.4 percent rise in the previous quarter and better than forecasts of 1.3 percent. It is the fastest growth rate since the first quarter of 2014.




Thursday November 30 2017
Brazil Jobless Rate At 9 Month Low of 12.2%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Brazil fell to 12.2 percent in the three months to October of 2017 compared to 12.4 percent in the previous period and matching market expectations. After touching a record high of 13.7 percent in March, the jobless rate has been steady falling mostly due to rise in informal employment.

Compared with the three months to July, the number of unemployed declined by 4.4 percent or 586 thousand to 12.7 million and employment went up by 1 percent or 868 thousand to 91.5 million. Job gains occured in construction (2.5 percent or 169 thousand people); information, communication, financial and real estate activities (3.2 percent or 311 thousand) and domestic services (2.8 percent or 173 thousand). 

The number of people in both the labour force (104.3 million) and detached from it (64.5 million) was nearly stable. 

The average real income received in all jobs by employed persons was estimated at BRL 2,127 in October quarter, higher than BRL 2,119 in the three months to July and BRL 2,076 in the period ended October 2016.


Friday November 10 2017
Brazil Inflation Rate Rises to 2.7% in October
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil increased 2.7 percent year-on-year in October of 2017, above 2.54 percent in September and compared to market expectations of 2.75 percent, mainly due to rising electricity cost. The inflation went up for the second month after touching 2.46 percent in August, the lowest since 1999. Yet, the cumulative inflation for the first ten months of the year stands at 2.21 percent, well below 5.78 percent in the same period of 2016.

Year-on-year, prices rose faster for housing (5 percent compared to 4.1 percent in September), namely domestic fuels (12.09 percent) and electricity (5.68 percent); health and personal care (6.86 percent compared to 6.77 percent) and personal expenses (5.05 percent compared to 4.73 percent). Inflation for communication was steady at 2.01 percent and cost of food and non-alcoholic beverages fell 2.14 percent, the same as in September. On the other hand, prices rose less for transport (3.73 percent compared to 3.99 percent); clothing (2.45 percent compared to 6.77 percent) and education (7.05 percent compared to 7.15 percent).

On a monthly basis, consumer prices went up 0.42 percent, above 0.16 percent in September and the highest since August of 2016. The housing index went up 1.33 percent and made the largest upward impact, mainly due to a 3.28 percent surge in electricity cost after a tax increase. In October, a new fee came into effect, representing an additional charge of BRL 3.50 per 100 kwh consumed. In September, the fee was lower at BRL 2.00 per 100 kwh consumed.