GlobalSource Partners | Country Insights

The Copom Minutes are, overall, more dovish than its previous version pertaining to the June meeting. Even so, although we expect the Selic rate target reach 13.75% per annum at the end of the year, that is, 0.25 p.p. below its current level, we do not have sufficient elements to determine whethe...

Contradictory signals

BRAZIL ECONOMICS · Report · 10 Aug 2026

Real wage decline in the second quarter comes in the context of an unemployment rate still near historical lows. This behavior of real income was not driven solely by inflation, which did in fact accelerate in the second quarter, but rather by a sharp slowdown in nominal wages. However, with a ti...

Lost horizon

BRAZIL ECONOMICS · Report · 06 Aug 2026

Once again, there was no surprise in the decision regarding the target for the Selic rate, which, we believe, may be an important part of the current monetary policy problem. The Monetary Policy Committee (Copom) reduced the benchmark interest rate by 0.25 p.p., to 14% per year, and “understands ...

Synthesis of the Brazilian Economy

BRAZIL ECONOMICS · Report · 03 Aug 2026

THE FROGS AND THE SCORPION As the nominal public deficit reached 10% of GDP in the 12 months ended in June, what previously concerned only economists, part of the financial market, and a few politicians has spilled over into broader circles, reaching the electoral arena.

High Tide

BRAZIL ECONOMICS · Report · 27 Jul 2026

Brazilian long-term real interest rates remain high, and a significant share of the recent increase originates from external factors. There is a stable long-run relationship between Brazilian and U.S. interest rates, with the latter having risen substantially since 2022. The interest rate spread ...

Inflation can wait

BRAZIL ECONOMICS · Report · 22 Jul 2026

We revisit the issue of the speed of inflation convergence to the target. We show that, even when the Central Bank’s inflation projections, based on the Selic rate path expected by market analysts, are above the target, the Copom very rarely makes a decision different from those anticipated in th...

One candle for God; another for the devil

BRAZIL ECONOMICS · Report · 20 Jul 2026

High-frequency data show a slowdown in economic activity in the second quarter, although some sectors remain resilient. This outcome is consistent with the current scenario, which combines restrictive monetary policy with fiscal, parafiscal and credit stimuli moving in the opposite direction. Muc...

Synthesis of the Brazilian Economy

BRAZIL ECONOMICS · Report · 13 Jul 2026

The past few weeks, emptied out by the holidays during the World Cup matches, school vacations, and the judicial and parliamentary recesses, have favored the persistence of a frozen electoral scenario, with Lula and Flavio Bolsonaro competing for the lead in opinion polls depending on the tone of...

2026 ELECTIONS: The Candidates

BRAZIL ECONOMICS · Report · 06 Jul 2026

Opinion polls on voter preferences regarding presidential candidates continue to reflect a frozen scenario between the two extremes - Lula and Flavio Bolsonaro - with the lead oscillating according to the news flow. At the moment, after the revelations of Flavio's involvement with Daniel Vorcaro,...

No further room

BRAZIL ECONOMICS · Report · 29 Jun 2026

The inflation and labor market data released last week, although pointing to some signs of weakening, are insufficient to support the continuation of Selic rate cuts. The Central Bank's projections do not guarantee convergence of inflation to the target in early 2028 with a cut in August. In the ...

Tomorrow never comes

BRAZIL ECONOMICS · Report · 23 Jun 2026

There were expectations that the Copom Minutes would help explain the evident gaps present in the statement released after last week’s meeting. There was no shortage of effort in this direction, but the results were not the best. Recapping, both in the statement itself and even more clearly in...

More of the same

BRAZIL ECONOMICS · Report · 22 Jun 2026

Public debt remains on an upward trajectory, and, given the current fiscal policy, we see no signs of reversal. Stabilizing it requires a substantial primary surplus, far removed from the deficit the government is expected to deliver this year and next. To keep debt to GDP constant over the long ...

Cards on the table

BRAZIL ECONOMICS · Report · 18 Jun 2026

In a longer-than-usual meeting, the Copom ultimately decided on another 0.25 p.p. reduction in the Selic rate target, to 14.25% per year, as expected by the market and by us. That said, although the Copom’s assessment, expressed in the statement released after the meeting, is unequivocally more h...

Living on borrowed time

BRAZIL ECONOMICS · Report · 15 Jun 2026

The economic outlook changed considerably over the second quarter of the year. Much of this, of course, reflected the depth and duration of the geopolitical crisis in the Strait of Hormuz. If the U.S. government expected the Iranian regime to capitulate quickly, particularly after eliminating its...

The Mencken theorem

BRAZIL ECONOMICS · Report · 09 Jun 2026 · 2 responses

The persistence of high interest rates has led to proposals to raise Brazil’s inflation target, currently set at 3%. It is argued that, due to inflation inertia, still a legacy of the hyperinflationary period, the Central Bank faces difficulties in reducing the Selic rate. This idea is mistaken. ...