Friday December 07 2018
Brazil Inflation Rate Lowest in 6 Months
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Annual inflation rate in Brazil eased to 4.05 percent in November of 2018 from 4.56 percent in October and below market expectations of 4.19 percent. It is the lowest inflation rate in six months, due to slowing prices for electricity and fuels. So far this year, inflation was 3.59 percent, above 2.5 percent in the same period of 2017.

Year-on-year, inflation eased for housing (4.46 percent compared to 6.54 percent), namely electricity (7.46 percent compared to 16.69 percent) and fuels (5.46 percent compared to 6.47 percent); transportation (6.03 percent compared to 7.38 percent); health (4.04 percent compared to 5.13 percent); personal expenses (3.11 percent compared to 3.17 percent); and clothing and footwear (0.31 percent compared to 0.84 percent). On the other hand, inflation picked up for food and non-alcoholic beverages (4.14 percent from 3.33 percent in October), namely tubers, roots and vegetables (26.96 percent compared to 7.88 percent), fruits (12.14 percent compared to 9.84 percent) and bread (6.31 percent compared to 5.54 percent).

On a monthly basis, consumer prices fell 0.21 percent, following a 0.45 percent rise in the previous month and worse than market expectations of a 0.1 percent drop. It is the biggest monthly decline in consumer prices since June of 2017 and the sharpest for a November month since at least 1994. Main downward pressure came from cost of transport (-0.74 percent), mainly due to fuels (-2.42 percent), namely gasoline (-3.07 percent); and housing (-0.71 percent), namely electricity (-4.04 percent) due to changes in tariffs. Prices also went down 0.71 percent for health and personal care, mainly due to personal hygiene items (-4.56 percent). On the other hand, food prices went up 0.39 percent.




Monday December 03 2018
Brazil Trade Surplus Widens in November
MDIC | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Brazil trade surplus increased to USD 4.06 billion in November 2018 from USD 3.54 billion in the same month of the previous year, slightly below market expectations of a USD 4.3 billion surplus. Exports grew 25.4 percent mostly due to shipments of soybeans and crude oil. Meantime, imports advanced 28.3 percent boosted by purchases of intermediate goods and capital goods.

Exports surged 25.4 percent year-on-year to USD 20.9 billion in November 2018, primarily due to sales of soybeans (145.8 percent), crude oil (103.6 percent), iron ore (22.4 percent), corn (32.5 percent), beef (6.0 percent), coffee beans (16.5 percent), cotton (36.6 percent) and soybean meal (22.2 percent). Meanwhile, shipments decreased for chicken meat (-5.1 percent). Exports of manufactured products surged 25 percent, boosted by fuel oils (793.5 percent), gasoline (3761 percent) and engine parts & turbines for aircrafts (142.3 percent). Among major trading partners, sales advanced 31 percent to China; 20.1 percent to the EU; and 6.9 percent to the US. 

Imports advanced 28.3 percent year-on-year to USD 16.9 billion, mainly driven by higher purchases of intermediate goods (15.7 percent), capital goods (170.2 percent) and fuels and lubricants (12.6 percent). Conversely, those of consumption goods declined (-7.1 percent). Imports came mainly from China (purchases up 8.6 percent), the EU (3.0 percent), the US (29.2 percent) and Argentina (12.0 percent).




Friday November 30 2018
Brazil GDP Annual Growth Rate Below Expectations at 1.3%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy advanced 1.3 percent year-on-year in the third quarter of 2018 after a downwardly revised 0.9 percent growth in the previous period but below forecasts of 1.6 percent. Still, it is the highest growth rate so far this year.

On the expenditure side, household spending rose at a slower pace (1.4 percent compared to 1.8 percent in the previous period) while government spending rebounded (0.3 percent compared to -0.3 percent). Also, gross fixed capital formation rose the most since the second quarter of 2013 (7.8 percent compared to 3 percent); exports recovered (2.6 percent compared to -2.9 percent) and imports jumped 13.5 percent, the most since the second quarter of 2011 and after a 6.5 percent gain in the previous period. 

On the production side, the services sector rose 1.2 percent, slightly higher than 1.1 percent in the previous period, with transportation (2.9 percent compared to 1.1 percent); financial services (1.1 percent compared to 0.5 percent); real estate (3.2 percent compared to 3 percent) rising faster while internal trade (1.6 percent compared to 2 percent) slowed. The industrial sector advanced 0.8 percent, the same as in the previous quarter. The mining sector expanded at a faster pace (0.7 percent compared to 0.5 percent) while manufacturing (1.6 percent compared to 1.7 percent) and utilities (0.5 percent compared to 3.1 percent) rose much less and construction continued to contract (-1 percent compared to -2.7 percent). The agriculture sector went up 2.5 percent after a 0.3 percent rise in Q2.

On a quarterly basis, the GDP grew 0.8 percent, higher than 0.2 percent in the previous period and matching market expectations. It marks the highest growth since the first quarter of 2017.




Friday November 30 2018
Brazil GDP Growth Highest in 1-1/2-Year
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy expanded 0.8 percent on quarter in the third quarter of 2018, above a 0.2 percent rise in the previous period and in line with market expectations. It is the highest growth rate since the first quarter of 2017, mainly due to a rebound in investment and government spending after a nationwide truck strike during May and June caused supply disruptions and weighed down on growth. So far this year, the Brazilian economy advanced 1.1 percent.

Consumer spending rose 0.6 percent after edging up 0.1 percent in the previous period. All other expenditure components rebounded: government consumption (0.3 percent compared to -0.4 percent); gross fixed capital formation (6.6 percent compared to -1.3 percent, the biggest rise since the fourth quarter of 2009); exports (6.7 percent compared to -5.1 percent, the biggest gain since the fourth quarter of 2013); and imports (10.2 percent compared to -1.2 percent, the highest increase since the second quarter of 2016).

On the production side, the services sector rose 0.5 percent after 0.3 percent in the previous quarter. Internal trade (1.1 percent compared to -0.5 percent) and transportation (2.6 percent compared to -1.6 percent) rebounded while real state activities rose less (1 percent compared to 1.3 percent) and financial services growth was flat at 0.4 percent. The industrial sector advanced 0.4 percent after falling 0.3 percent in each of the previous two quarters. Manufacturing (0.8 percent compared to -0.7 percent) and construction (0.7 percent compared to -0.4 percent) rebounded and mining increased more (0.7 percent compared to 0.5 percent) while utilities shrank faster (-1.1 percent compared to -0.6 percent). Finally, agriculture went up 0.7 percent, after a 0.5 percent gain in the previous period.

Year-on-year, the economy expanded 1.3 percent after a downwardly revised 0.9 percent growth in the previous quarter but below forecasts of 1.6 percent. Still, it is the highest growth rate so far this year. 




Thursday November 29 2018
Brazil Jobless Rate Matches Estimates at 11.7%
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Brazil decreased further to 11.7 percent in the three months to October of 2018 from 12.3 percent in the May-July period, matching market expectations. It is the seventh straight decline in jobless rate and the sharpest since December, mainly due to informal work.

Compared with the three months ended in July of 2018, the number of unemployed went down by 517 thousand to 12.351 million. Employment rose by 1240 thousand to 92.901 million, with most job gains occuring in other services (+240 thousand); trade, repair of motor vehicles and motorcycles (+215 thousand); information and communication activities, finance, real estate, professional and administrative activities (+214 thousand); public administration, defense, social security and education (+155 thousand) and construction (+125 thousand). Also, both the private sector (+476 thousand), namely informal work (+534 thousand) and the public sector (+57 thousand) created jobs. In contrast, a decrease was seen in formal work (-58 thousand).

The number of people in the labour force increased by 724 thousand to 105.252 million and those detached from the labour force decreased by 383 thousand to 65.108 million.

Compared with the same period of 2017, the number of unemployed fell by 389 thousand from 12.740 million, while employment grew by 1356 thousand from 91.545 million.

The average real income was estimated at BRL 2,230 in the three months to October, above BRL 2,227 in the three months to July and also above BRL 2,221 a year ago.




Wednesday November 07 2018
Brazil October Inflation Rate at Over 1-1/2-Year High
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Annual inflation rate in Brazil rose to 4.56 percent in October of 2018 from 4.53 percent in September, below market expectations of 4.66 percent. It is the highest inflation rate since March 2017. Main upward pressure came from prices of food and fuels.

Year-on-year, inflation picked up for food and non-alcoholic beverages (3.33 percent from 2.68 percent in September), such as milk and other dairy products (14.02 percent vs 13.18 percent), fruits (9.84 percent vs 9.67 percent); and transport (7.38 percent vs 6.93 percent), namely fuels (20.07 percent vs 17.69 percent). Meanwhile, prices slowed for: housing (6.54 percent vs 7.80 percent), particularly electricity (16.69 percent vs 20.37 percent); health and personal care (5.13 percent vs 5.39 percent); personal expenses (3.17 percent vs 3.25 percent); clothing and footwear (0.84 percent vs 1.22 percent); education (5.25 percent vs 5.27 percent); household goods (2.23 percent vs 1.07 percent) and communication (0.02 percent vs 0.41 percent).

On a monthly basis, consumer prices went up 0.45 percent, easing from a 0.48 percent increase in September and below market consensus of a 0.55 percent rise. Prices advanced at a slower pace mainly for transport (0.92 percent vs 1.69 percent), namely ethanol (4.07 percent vs 5.42 percent), diesel oil (2.45 percent vs 6.91 percent), gasoline (2.18 percent vs 3.94 percent) and air fares (7.49 percent vs 16.81 percent). Also, monthly inflation softened for housing (0.14 percent vs 0.32 percent), including rents (0.11 percent vs 0.25 percent) and electricity (0.12 percent vs 0.46 percent). In contrast, cost rose faster for food & non-alcoholic beverages (0.59 percent vs 0.10 percent), of which tomato (51.27 percent), English potatoes (13.67 percent) and chicken (1.95 percent).


Thursday November 01 2018
Brazil Trade Surplus Rises in October
Joana Taborda | joana.taborda@tradingeconomics.com

The trade surplus in Brazil increased to USD 6.12 billion in October of 2018 from USD 5.2 billion in the same month of the previous year. It compares with market expectations of USD 6.849 billion. Sales surged to China, boosted by crude oil and soybeans. Imports rose mainly due to purchases of crude oil.

Exports increased 17.7 percent year-on-year to USD 22.22 billion, mainly boosted by sales of crude oil (137.6 percent), soybeans (124 percent), iron ore (5.1 percent), beef (24.1 percent) and cotton (12.9 percent). Sales jumped 75.5 percent to China; 8.8 percent to the European Union; and 37.2 percent to the US.
 
Imports also increased 17.7 percent year-on-year to USD 16.1 billion. Purchases went up for intermediate goods (16.5 percent), consumption goods (12.9 percent), fuels and lubricants (30 percent) and capital goods (16.4 percent). Imports came mainly from China (purchases up 13.9 percent), the EU (4.7 percent), the US (23 percent), and the Middle East (135.5 percent).



Wednesday October 31 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 31 October 2018 as widely expected, keeping borrowing costs at the lowest level in modern history amid target inflation and lackluster GDP growth. It was the first monetary policy meeting after the presidential election.

Policymakers underscored that 1) recent indicators of economic activity point to recovery of the Brazilian economy, at a more gradual pace than envisaged early this year; 2) the global outlook remains challenging, with reduction of risk appetite towards emerging economies, and 3) various measures of underlying inflation are running at appropriate levels.


The central bank started its easing cycle in October of 2016 after the inflation rate eased from double digits. The annual inflation rate 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.

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. Meantime, industrial production in Brazil advanced 2 percent year-on-year in August 2018, following an upwardly revised 4.2 percent surge in the prior month and missing market consensus of a 3.2 percent gain. Year-to-date, industrial activity went up 2.5 percent over a year ago.

The median estimate in the last central bank poll of economists (26 Octubre 2018) currently points to growth of 1.36 percent for 2018 (vs 1.35 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) and 8.00 for 2019 (unchanged).





Tuesday October 30 2018
Brazil Jobless Rate Drops to 11.9% as Expected
IBGE | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The unemployment rate in Brazil fell to 11.9 percent in the three months to September of 2018 from 12.1 percent in the April-June period of 2018, in line with market expectations. It was the sixth straight decline in jobless rate and the steepest since December last year.

Compared with the three months ended in June 2018, the number of unemployed decreased by 474 thousand to 12.492 million. Employment increased by 1,384 thousand to 92.622 million, with main job adds recorded in agriculture, livestock, forestry and fishing (+264 thousand); information and communication activities, finance, real estate, professional and administrative activities (+263 thousand); construction (+229 thousand); other services (+192 thousand) and public administration, defense, social security and education (+183 thousand). Also, both the private sector (+660 thousand), mostly informal work (+522 thousand) and the public sector (+123 thousand) created jobs.

The number of people in the labour force rose by 910 thousand to 105.114 million and those detached from the labour force went down by 445 thousand to 65.198 million.

Compared with the same period of 2017, the number of unemployed fell by 469 thousand from 12.961 million, while employment went up by 1,325 thousand from 91.297 million.

The average real income was estimated at BRL 2,222 in the three months to September, below BRL 2,229 in the three months to June but above BRL 2,208 a year earlier.


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).