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.




Friday November 03 2017
Brazil Trade Surplus Jumps 126% YoY in October
Joana Taborda | joana.taborda@tradingeconomics.com

Brazil trade surplus increased to USD 5.2 billion in October of 2017 from a USD 2.3 billion surplus in the corresponding month a year earlier and compared to market expectations of USD 5.25 billion. It is the biggest surplus ever for an October month as exports rose the most in more than six years.

Sales jumped 37.6 percent year-on-year to USD 18.87 billion, following an 18.1 percent rise in September. It is the biggest gain for exports since June of 2011, boosted by higher sales of iron ore (68.9 percent); crude oil (5.9 percent); soy beans (116.2 percent); sugar (14.4 percent); corn grain (287.2 percent); cellulose (12.2 percent) and beef (34.1 percent). Shipments to China, the largest export partner, rose 27.8 percent, mainly due to soybeans, iron ore, copper cathodes, beef, copper ore, manganese ore, raw cotton and hydrocarbons. Sales to the US, the second largest export market went up 23 percent due to crude oil, cellulose, earthmoving machinery and equipment, cast iron pipes, semimanufactured gold, aviation engines and turbines, iron/steel semimanufactured, ethanol, iron/steel wire rods and frozen orange juice.

Imports went up 20.2 percent to USD 13.67 billion, following a 12.5 percent rise in the previous month and the highest increase since July of 2013. Purchases went up 68.2 percent for fuels and lubricants, mainly diesel, coal, gasoline, crude oil, natural gas, electricity, cokes, liquefied propane and kerosene; 18.7 percent for capital goods, namely cargo vehicles, paper machines, airplanes, LED lamps, dumpers for transport, helicopters, chassis with diesel engine, medical instruments and apparatus and industrial robots; 9.3 percent for consumption goods namely passenger cars, immunological products, fractions of blood, medicines, video receivers/decoders and t-shirts; 7.9 percent for intermediate goods. Most imports came from China, with purchases rising 23.7 percent while those from the US edged up 0.5 percent.




Tuesday October 31 2017
Brazil Jobless Rate Down to 12.4%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Brazil fell for the sixth straight period to 12.4 percent in the three months to September of 2017 from 12.6 percent in the three months to August. It is the lowest rate so far this year, in line with market expectations.

Compared with the three months to June, the number of unemployed declined 3.9 percent to 12.961 million and employment went up by 1.2 percent to 91.297 million. Job gains occured in accomodation and food (3.4 percent); information, communication , financial and real estate activities (2.4 percent); construction (2.1 percent); public administration, defense, social security (1.6 percent); domestic services (1.3 percent); other services (1.2 percent); industry (0.6 percent) and internal trade (0.5 percent). On the other hand, job losses were seen in agriculture (-0.4 percent) and transportation and storage (-0.2 percent). 

The labour force increased by 0.5 percent o 104.258 million and those detached from the labour force edged up by 0.1 percent to 64.464 million. 

The average real income usually received in all jobs by employed persons was estimated at BRL 2,115 in the quarter ended September 2017, higher than BRL 2,108 in the three months to June and BRL 2,065 a year earlier. 




Wednesday October 25 2017
Brazil Slashes Key Rate By 75 Bps to 7.50%
Mario | mario@tradingeconomics.com

The Central Bank of Brazil slashed unanimously its key Selic rate by 75 basis points to 7.50% percent on October 25th of 2017 following a 100-bps trim in September 6th of 2017. The cut, widely anticipated, was the ninth straight, bringing borrowing costs to the lowest since March 2013 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, the Copom views a moderate reduction of the pace of easing as appropriate.

The central bank started its easing cycle in October last year after the inflation rate eased from double digits. Inflation slowed faster than expected in the past seven months due to subdued economic activity and a stronger real. Consumer prices in Brazil increased 2.54 percent year-on-year in September of 2017, slightly higher than a 2.46 percent rise in August which was the lowest inflation rate since February of 1999. It compares with market expectations of 2.47 percent. It was the first rise in inflation rate since August of 2016 amid higher prices for transport.

The economic recovery is still taking longer than initially expected, albeit recent improvements seen lately. Industrial production increased 4 percent in August of 2017 over the same month in the previous year. It has remained on positive ground for four straight months. Meanwhile, the IBC-Br index of economic activity rose 1.5 percent year-on-year. Furthermore, considering the January to September period, car production grew 27 percent compared with the same period of 2016.

The median estimate in a central bank poll of economists currently (October 20th of 2017) points to growth of 0.73 percent in 2017 (vs 0.50 in the previous meeting) and 2.50 percent in 2018 (vs 2.00 percent). Analysts expect the Selic rate to end 2017 at 7.00 percent (vs 7.25 percent).




Friday October 06 2017
Brazil Inflation Rate Edges Up to 2.54%, 1st Rise in 13 Months
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil increased 2.54 percent year-on-year in September of 2017, slightly higher than a 2.46 percent rise in August which was the lowest inflation rate since February of 1999. It compares with market expectations of 2.47 percent. It is the first rise in inflation rate since August of 2016 amid higher prices for transport. Yet, the cumulative inflation for the first nine months of the year stands at 1.78 percent, well below 5.51 percent in the same period of 2016.

Year-on-year, prices rose faster for transport (3.99 percent compared to 3.08 percent in August) and personal expenses (4.73 percent compared to 4.25 percent) while the inflation slowed for housing (4.1 percent compared to 4.88 percent); health (6.77 percent compared to 6.78 percent); clothing (4.18 percent compared to 2.33 percent) and education (7 percent compared to 7.15 percent). Prices of food and non-alcoholic beverages fell faster (-2.14 percent compared -2.01 percent), marking a new record drop since at least 1990.

On a monthly basis, consumer prices increased 0.16 percent, below 0.19 percent in August but above market expectations of 0.09 percent. Transport cost made the highest upward pressure as prices increased 0.79 percent, mainly due to gasoline (2.22 percent) and air fares (21.9 percent). On the other hand, prices fell 2.48 percent for electricity and 0.41 percent for food.


Monday October 02 2017
Brazil Trade Surplus at Record High for September Month
MDIC | Joana Ferreira | joana.ferreira@tradingeconomics.com

Brazil trade surplus increased to USD 5.2 billion in September 2017 from USD 3.8 billion in the corresponding month a year earlier, beating market expectations of USD 5.0 billion. It was the biggest surplus posted for a September month since the series began.

Exports jumped 18.1 percent to USD 18.67 billion from USD 15.80 billion a year earlier, boosted by higher sales of primary goods (30.2 percent) and industrial products (10.3 percent), of which manufactured (12.4 percent) and semimanufactured (5.8 percent). Among major trading partners, exports increased to China (43.3 percent), the US (8 percent) and Argentina (25.9 percent).

Imports rose 12.5 percent to USD 13.49 billion from USD 11.99 billion in September 2016, as purchases rose the most for fuels and lubricants (20.3 percent), intermediate goods (9.6 percent), consumer goods (10.4 percent) and capital goods (28.1 percent). Among major trading partners, imports went up from China (36.1 percent) and the EU (25.6 percent).

In the first eight months of the year, the trade surplus widened to USD 53.28 billion from USD 36.18 billion in the same period of 2016.


Sunday October 01 2017
Brazil Jobless Rate Below Expectations
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Brazil fell to 12.6 percent in the three months to August of 2017 from 12.8 percent in the previous period and lower than market expectations of 12.7 percent. The jobless rate fell for the fifth consecutive period to the lowest so far this year. On the other hand, the average real income fell to the lowest so far in 2017.

Compared with the three months to May, the number of unemployed declined 4.8 percent to 13.113 million and employment went up by 1.5 percent to 91.061 million. Job gains occured in other services (3 percent); construction (2.9 percent); public administration, defense, social security (2.7 percent); transportation and storage (2.5 percent); industry (1.9 percent); accomodation and food (1.6 percent); internal trade (1 percent) and information, communication , finalncial and real estate activities (0.9 percent). On the other hand, job losses were seen in agriculture (-0.5 percent) and domestic services (-0.2 percent). 

The labour force increased by 0.7 percent o 104.175 million and those detached from the labour force edged down by 0.1 percent to 64.379 million. 

The average real income usually received in all jobs by employed persons was estimated at BRL 2,105 in the quarter ended August 2017, below BRL 2,116 in the three months to May and BRL 2,116 a year earlier. 


Thursday September 07 2017
Brazil Trims Key Rate by 100 Bps to 8.25%
Mario | mario@tradingeconomics.com

The Central Bank of Brazil unanimously cut its key Selic rate by 100 basis points to 8.25 percent on September 6th of 2017, as widely anticipated. It was the eighth straight rate decline, bringing borrowing costs to the lowest since 2013 amid slowing inflation and a sticky contraction. The decision was unanimous and no bias was adopted. It follows a 100 bps cut in the July 26th of 2017 meeting.

The statement underscored that economic activity remains consistent with a gradual recovery of the Brazilian economy; that the global outlook has been favorable; and that inflation developments remain favorable, with various indicators running at low levels. The Committee judged that economic conditions prescribe accommodative policy, with economic reforms contributing to the reduction of the structural interest rate. Regarding the next meeting, the Copom views a moderate reduction of the pace of easing as appropriate.

The central bank started its easing cycle in October last year after the inflation rate eased from double digits. Inflation slowed faster than expected in the past seven months due to subdued economic activity and a stronger real. Consumer prices in Brazil increased 2.46 percent year-on-year in August of 2017, slowing from a 2.71 percent rise in July and below market expectations of 2.6 percent. The inflation rate eased for the 12th consecutive month to a new low since February of 1999. It is also the lowest rate for an August month since at least 1980 as a record harvest dragged down food prices.

The economic recovery is still taking longer than initially expected, albeit recent improvements seen lately. Auto production in Brazil jumped 15.4 percent to 260.3 thousand vehicles in August of 2017 from a revised 225.5 thousand in the previous month. It is the strongest increase in car production since May. Also, consumer confidence rose to 101.6 in August 2017 from 99.5 in the previous month. It is the strongest reading since April, as consumers are more upbeat about financial situation, less indebted and more likely to do major purchases.

The median estimate in a central bank poll of economists currently points to growth of 0.50 percent in 2017 (vs 0.34 percent back in July of 2017) and 2.00 percent in 2018 (unchanged from July). Analysts expect the Selic rate to end 2017 at 7.25 (vs 7.50 percent).


Wednesday September 06 2017
Brazil Inflation Rate Falls to Fresh 1999 Low of 2.46%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil increased 2.46 percent year-on-year in August of 2017, slowing from a 2.71 percent rise in July and below market expectations of 2.6 percent. The inflation rate eased for the 12th consecutive month to a new low since February of 1999. It is also the lowest rate for an August month since at least 1980 as a record harvest dragged down food prices.

Year-on-year, cost of food and beverages went down 2.01 percent, following a 0.66 percent drop in July. It is the biggest fall since at least 1990. Additional downward pressure came from prices of furnishings and household equipment (-1.63 percent compared to -0.05 percent in July). In addition, cost rose at a slower pace for health (6.78 percent compared to 7.19 percent) and education (7.15 percent compared to 7.94 percent). On the other hand, inflation accelerated for housing (4.88 percent compared to 4.6 percent); transport (3.08 percent compared to 1.8 percent in July) and clothing (2.33 percent compared to 2.2 percent).

On a monthly basis, consumer prices went up 0.19 percent, below a 0.24 percent rise in July and lower than market expectations of 0.31 percent. Prices of food went down 1.07 percent, the fourth consecutive drop amid a record harvest. Main declines were reported for beans (-14.86 percent); tomato (-13.85 percent); sugar (-5.9 percent); milk (-4.26 percent); fruit (-2.57 percent) and meat (-1.75 percent). Additional downward pressure came from cost of communication (-0.56 percent). The biggest upward impact came form transport cost (1.53 percent), mainly due to a 6.67 percent rise in fuels.


Friday September 01 2017
Brazil Trade Surplus Beats Expectations
Joana Taborda | joana.taborda@tradingeconomics.com

The trade surplus in Brazil widened 35.3 percent year-on-year to USD 5.6 billion in August of 2017, above market expectations of a USD 4.1 billion surplus. The country’s trade balance has been in surplus since March of 2015.

Exports went up 14.7 percent year-on-year to USD 19.475 billion, mainly boosted by higher sales of primary articles (24.2 percent), manufactured (9.7 percent) and semimanufactured products (3.4 percent). Among major trading partners, exports increased to China (41 percent), Argentina (30.8 percent) and the US (2.2 percent)
 
Imports rose 8 percent to USD 13.876 billion, due to purchases of fuels and lubricants (56.6 percent), capital goods (6.6 percent), intermediate goods (4.8 percent) and consumer goods (1 percent). Among major trading partners, imports went up from China (22.5 percent) but fell from the US (-5.8 percent).
 
Considering the first eight months of the year, the country’s surplus increased 48.6 percent to USD 48.109 billion. Exports advanced 18.1 percent to USD 145.946 billion and imports went up at a slower 7.3 percent to USD 97.837 billion.