BRAZIL ECONOMICS
Analysts
Alexandre Schwartsman
Former Central Bank Deputy Governor
Cristina Pinotti
Former Chief Economist, DIVESPDatabanks
Recent Country Insights
Requiem for the Fiscal Framework
BRAZIL ECONOMICS · Report · 17 Apr 2024
The recently proposed Budget Directives Law (LDO) revealed, intentionally or not, the limits of the so-called New Fiscal Framework. This is not due to either of the primary result for 2024 (kept at the same level suggested by the bimonthly revision of March) or even the reduction of the primary s...
Inflation in the United States and Interest Rates in Brazil
BRAZIL ECONOMICS · Report · 15 Apr 2024
Inflation in the United States has been more persistent than expected according to CPI data disclosed last week, which indicated a continued acceleration trend, especially in core measures. The worsening of the underlying measures of US inflation has occurred against a backdrop of heated economic...
Exchange Rate: Brazil and Its Peers
BRAZIL ECONOMICS · Report · 08 Apr 2024
The behavior of the Real, which in recent weeks has weakened beyond the level of R$ 5.00/US$, has followed the global appreciation of the dollar in response to the increase in long-term interest rates in the United States. This behavior is different than that of the currencies of Mexico and Colom...
Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 01 Apr 2024
OVERVIEW The decline of Lula’s approval ratings, as indicated by various polling agencies in the past few weeks, has made his position in negotiations with Congress (where he has never had a majority) even more vulnerable. The bargaining is becoming more bitter, with additional pressures for b...
Risk or Base Case Scenario?
BRAZIL ECONOMICS · Report · 27 Mar 2024
The Minutes of the COPOM meeting disclosed on Tuesday morning reflect the decision to alter the forward guidance, maintaining a “conditional commitment” to cut the SELIC rate by 50 basis points only at the meeting scheduled for May, thus leaving doubt regarding the reductions at subsequent meetin...
The Strength of Internal Demand and the Respective Risks
BRAZIL ECONOMICS · Forecast · 25 Mar 2024
We have revised our growth projection for the year upward to 1.8%. Given the low carry-over from last year, this annual figure requires quarter-on-quarter marginal growth greater than the sustainable pace of output expansion, implying an additional decline of unemployment, and thus persistence of...
COPOM Watch: Singular, at last
BRAZIL ECONOMICS · Report · 21 Mar 2024
As expected, at its March meeting the Central Bank’s Monetary Policy Committee reduced the SELIC rate by 0.50%, from 11.75% to 10.75%. And although the communiqué that announced the meeting’s results was very similar to that disclosed in January, there was a fundamental change: while the previous...
Consequences of Economic Activity on Monetary Policy
BRAZIL ECONOMICS · Report · 18 Mar 2024
This week, the COPOM is expected to reduce the SELIC rate by a further 50 basis points to 10.75% and maintain the forward guidance for further cuts of the same size. In 2023, service prices were marked by disinflation, but there are risks to the continuity of this process due to the ongoing stron...
What Can Be Expected from the External Sector in 2024
BRAZIL ECONOMICS · Report · 11 Mar 2024
With the increasing importance of imports of cryptoassets and small value transactions, considered in the trade balance that integrates the Balance of Payments calculated by the Central Bank, the estimates need to be carried out with care. The traditional trade balance of imports, estimated by th...