Friday December 09 2016
Brazil Inflation Rate Falls To Nearly 2-Year Low
IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com

Consumer prices in Brazil rose 6.99 percent in the 12 months through November 2016, down from an increase of 7.87 percent in the previous month and below market consensus of a 7.08 percent gain. It was the lowest inflation rate since December 2014, as prices rose at a slower pace for food, housing and transportation. Still, inflation remained above the central bank's official target of 4.5 percent.

Prices rose at a slower pace for: food and non-alcoholic beverages (+10.17 percent from +12.41 percent in October); housing and utilities (+3.97 percent from +4.45 percent); and transport (+4.48 percent from +5.31 percent). Additional upward pressure came from: Health (+11.27 percent); recreation and culture (+6.15 percent); clothing (+4.40 percent); furnishings and household equipment (+1.81 percent); and communication (+1.69 percent).

The highest inflation rates were recorded for Belém (+8.04 percent), Porto Alegre (+7.87 percent), Campo Grande (+7.76 percent) and Recife (+7.70 percent), while the lowest rates were recorded for Curitiba (+5.48 percent), Vitória (+5.50 percent) and Brasília (+5.72 percent).

On a monthly basis, consumer prices increased by 0.18 percent, following a 0.26 percent rise in October. Cost rose at a slower pace for housing (+0.30 percent from +0.42 percent in October) and transport (+0.28 percent from +0.75 percent); while it fell for food (-0.20 percent from -0.05 percent). 




Friday December 02 2016
Brazil Trade Surplus Widens 297% YoY
Joana Taborda | joana.taborda@tradingeconomics.com

The trade surplus in Brazil rose to USD 4.76 billion in November of 2016, much higher than a USD 1.2 billion surplus a year earlier. It is the wider surplus for a November month on record and better than market expectations of a USD 3 billion. Exports recorded the biggest gain in six years while imports continued to contract. The country has been reporting trade surpluses since March last year, as a weaker real weighed down on imports but failed to boost exports.

Exports rose 17.5 percent year-on-year to USD 16.22 billion, the first anual rise in three months and the biggest gain since November of 2011. A weaker real has failed to boost sales due to lower international prices for the country's main export commodities, including soybeans, iron, oil, sugar and coffee. Yet, shipments remain around 38 percent lower than a record high reached in August of 2011. Commodities account for nearly 50 percent of total sales.
 
Imports slumped 9.1 percent year-on-year to USD 11.46 billion. Purchases have been falling systematically since 2014 due to a slump in the real and lower internal demand amid a severe recession. Imports fell in all months since March 2014 except in August this year (+0.4 percent year-on-year) and in September of 2014 (+9 percent year-on-year), remaining around 50 percent lower than a record high reached in October of 2013.

Considering the first eleven months of the year, exports declined 3.3 percent over a year earlier to USD 169.3 billion. Sales declined mainly for coffee (-15.9 percent); oil (-14.3 percent); soybean meal (-11.7 percent); corn (-11.1 percent); iron (-10.4 percent) and copper (-8.4 percent) but increased for platforms for oil extraction (222.7 percent); passenger cars (38.2 percent); refined sugar (22.7 percent) and airplanes (14.7 percent). Imports fell at a faster 22 percent to USD 126 billion, due to declines in purchases of fuels and lubricants (-44.9 percent); capital goods (-22 percent), consumption goods (-21.8 percent) and intermediate goods (-17.2 percent). As a result, the trade surplus increased to USD 43282 billion compared to a USD 13445 billion surplus a year earlier. 




Wednesday November 30 2016
Brazil Cuts Key Interest Rate to 13.75%
Joana Ferreira | joana.ferreira@tradingeconomics.com

The Central Bank of Brazil lowered its benchmark Selic rate to 13.75 percent on November 30th, its lowest in over a year. The decision was widely expected by markets, as policymakers aim to bring inflation back to target amid a deep economic recession and a new political scandal.

The central bank began easing monetary policy during its October meeting, as it lowered its interest rate for the first time in four years. Although inflation rate slowed recently to a 20-month low of 7.87 percent in October, it remained well above the central bank's mid-point target of 4.5 percent. Furthermore, Brazil's economy shrank for the seventh consecutive quarter in the three months to September 2016, as investments dropped sharply and household consumption continued to fall.

Meanwhile, a scandal within President Michel Temer's cabinet raised fears he could lose support in Congress to push ahead austerity reforms; and added pressure on the real, which has dropped by more than 6 percent against the dollar this month. 

Inflation expectations fell to 6.72 percent for 2016 and 4.93 percent for 2017, according to the latest FOCUS Market Readout released by the central bank on November 25th. Meanwhile, the economy is expected to contract by 3.49 percent in 2016 and to grow by 0.98% next year.




Wednesday November 30 2016
Brazil GDP Shrinks 2.9% YoY in Q3
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy contracted 2.9 percent year-on-year in the third quarter of 2016, following a downwardly revised 3.6 percent decrease in the previous period and better than market expectations of a 3.2 percent drop. It is the 10th straight quarter of contraction, hurt by internal demand and a slowdown in exports.

On the expenditure side, household spending fell 3.4 percent (-4.8 percent in Q2), government consumption declined 0.8 percent (-0.5 percent in Q2) and gross fixed capital formation shrank 8.4 percent (-8.6 percent in Q2). Exports rose a meager 0.2 percent (4 percent in Q2) and imports declined 6.8 percent (-10.4 percent in Q2).

On the production side, declines were recorded for agriculture (-6 percent compared to -6.1 percent); mining (-1.3 percent compared to -5.1 percent); manufacturing (-3.5 percent compared to -4.7 percent); construction (-4.9 percent compared to -3.2 percent) and services (-2.2 percent compared to -2.7 percent). Only utilities output (+4.3 percent compared to 8.7 percent), real estate activities (+0.1 percent compared to 0.3 percent) and public education and health (0.1 percent compared to 0.5 percent) increased.

On a quarterly basis, the economy shrank 0.8 percent, worse than a 0.4 percent contraction in the previous period. 




Wednesday November 30 2016
Brazil GDP Contracts For 7th Quarter
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The Brazilian economy shrank 0.8 percent on quarter in the three months to September of 2016, in line with market expectations. It is the seventh straight quarter of contraction as consumer spending continued to fall and public expenditure and investment shrank.

Consumer spending went down 0.6 percent, following a 1 percent fall in the previous three months, marking the seventh straight quarter of declines. Public expenditure declined 0.3 percent after being flat in the previous quarter and gross fixed capital formation shrank 3.1 percent after rising 0.5 percent in the previous period, the first gain in more than two years . In addition, exports fell at a faster 2.8 percent (-1.8 percent in the previous period) and imports came back to contraction (-3.1 percent compared to 2.8 percent in the previous period).

On the production side, industrial output came back to contraction (-1.3 percent compared to 1.2 percent in the previous period), due to a slump in manufacturing (-2.1 percent from 0.1 percent), utilities (-0.2 percent from 1.2 percent) and construction (-1.7 percent from -1.5 percent) while mining rose 3.8 percent (1.4 percent in the previous period). Services shrank 0.6 percent, the same as in the previous period, marking the seventh straight quarter of decline. Agriculture fell 1.4 percent (-0.8 percent in the previous period). 

Contraction for the second quarter was revised down to 0.4 percent from 0.6 percent.

Year-on-year, the economy shrank 2.9 percent, compared to expectations of a 3.2 percent decline. 




Tuesday November 29 2016
Brazil Unemployment Rate Remains at Record High of 11.8%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in Brazil remained unchanged at 11.8 percent in the three months to October of 2016, slightly above market expectations of 11.7 percent. It is the highest jobless rate since the series began in 2012.

Compared with the May-July period, the number of unemployed persons rose by 1.6 percent or by 195 thousand to 12.04 million while employment fell by 0.7 percent or by 604 thousand to 89.88 million. Employment fell the most in agriculture (-5 percent to 8.9 million), followed by construction (-4 percent to 7.07 million); transport, communication and mail (-1.4 percent to 4.44 million); information, communication, financial services and real estate (-1.1 percent to 9.58 million); domestic services (-1 percent to 6.19 million); industry (-0.9 percent to 11.52 million) and trade and repair of motor vehicles (-0.5 percent to 17.23 million). 

People attached to the labour force, that is, either employed or unemployed but actively seeking for job decreased by 0.4 percent or by 409 thousand to 101.92 million. In contrast, those detached from the labour force rose by 1 percent or by 668 thousand to 64.727 million. The labour force participation rate fell to 61.2 percent from 61.5 percent.

A year earlier, unemployment was lower at 8.9 percent. 




Wednesday November 09 2016
Brazil Inflation Rate Down to 7.87% in October
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

Consumer prices in Brazil rose 7.87 percent year-on-year in October of 2016, easing from an 8.48 percent increase in September. It is the lowest inflation rate since February last year and in line with market estimates of 7.9 percent as cost increased less for food, transport and housing.

Prices rose at a slower pace for food and non-alcoholic beverages (12.41 percent compared to 13.33 percent in September), with cost of cereals, pulses and oleaginous recording the biggest gain (54.13 percent). Inflation also eased for transport (5.31 percent compared to 6.33 percent), with fuels slowing sharply (6.98 percent). In addition, housing prices increased at a slower 4.45 percent (4.78 percent), with electricity falling at a faster 6.41 percent. 

On a monthly basis, consumer prices increased 0.26 percent, following a meager 0.08 percent rise in September. Transport recorded the biggest increase (0.75 percent), followed by clothing (0.45 percent) and health and personal care (0.43 percent). In contrast, prices of housing related articles (-0.13 percent) and food (-0.05 percent) edged down. 


Tuesday November 01 2016
Brazil Posts Biggest October Trade Surplus in 5 Years
MDIC | Joana Ferreira | joana.ferreira@tradingeconomics.com

Brazilian trade surplus increased by 15.2 percent to USD 2.3 billion in October 2016 from USD 2.0 billion the same month of the previous year, but missing markets consensus of USD 2.7 billion. It was the biggest surplus posted for an October month since 2011.

Exports declined 14.5 percent to USD 13.72 billion from USD 16.05 billion a year earlier, dragged by lower sales of primary goods (-22.4 percent) and industrial products (-7.6 percent), of which manufactured (-8.6 percent) and semimanufactured (-5.2 percent). Among major trading partners, exports decreased to the Euro Area (-11.3 percent), China (-1.5 percent), the US (-11.2 percent) and Argentina (-1.4 percent).

Imports shrank 19.1 percent to USD 11.38 billion from USD 14.05 billion in October 2015, as purchases fell the most for fuels and lubricants (-55.1 percent), consumer goods (-17.5 percent), intermediate goods (-8.7 percent) and capital goods (-23.7 percent). Among major trading partners, imports went down to the Euro Area (-11.6 percent), China (-9.2 percent), the US (-11.5 percent) and Argentina (-15.2 percent).

Considering the January-October period, the trade surplus widened sharply to USD 38.53 billion compared to USD 12.25 billion the same period in 2015, as exports fell 4.6 percent to USD 153.09 billion while imports shrank 22.7 percent to USD 114.56 billion.


Thursday October 27 2016
Brazil Unemployment Rate Below Expectations at 11.8%
IBGE | Joana Taborda | joana.taborda@tradingeconomics.com

The jobless rate in Brazil came in at 11.8 percent in the three months to September of 2016, below market expectations of 11.9 percent but staying at the highest level since the series began in 2012. In the previous quarter, unemployment was lower at 11.3 percent.

Compared with the April-June period, the number of unemployed persons rose by 3.8 percent or by 437 thousand to 12 million while employment fell by 1.1 percent or by 963 thousand to 89.8 million. Employment fell the most in agriculture (-4.2 percent to 9 million), followed by construction (-3.7 percent to 7.14 million); trade and repair of motor vehicles (-1.8 percent to 17 million); domestic services (-2.1 percent to 6.18 million); information, communication, financial services and real estate (-1.2 percent to 9.57 million); industry (-0.7 percent to 11.6 million) and public administration (-0.1 percent to 15.8 million). In contrast, activities related to hotels and restaurants added 192 thousand or 4.3 percent more jobs (to a total of 4.68 million). 

People attached to the labour force, that is, either employed or unemployed but actively seeking for job decreased by 0.5 percent or by 527 thousand to 101.8 million. In contrast, those detached from the labour force rose by 1.2 percent or by 756 thousand to 64.64 million. The labour force participation rate fell to 61.2 percent from 61.6 percent.

A year earlier, unemployment was lower at 8.9 percent. 


Wednesday October 19 2016
Brazil Cuts Key Rate to 14%
Joana Taborda | joana.taborda@tradingeconomics.com

The central bank of Brazil lowered its benchmark SELIC rate by 25bps to 14 percent on October 19th 2016. It is the first rate cut in four years amid a severe contraction and signs of slowing inflation.

The decision came in line with market expectations.
 
The central bank said recent indicators suggest economic activity below expectations in the short-term although it expects a gradual recovery. Industrial production fell 3.8 percent in August from July, the biggest drop since January of 2012 and retail sales were down 0.6 percent for the second straight month in August. The GDP shrank 0.6 percent on quarter in the three months to June of 2016, the sixth straight quarter of contraction.
 
Policymakers also said recent inflation data came more favorable than expected due to lower food prices. Yet, it slowed to 8.48 percent in September, the lowest in sixteen months. Inflation forecasts for 2016 were lowered to 7 percent and were also cut to 4.3 percent in 2017 and 3.9 percent in 2018. The central bank added that the inflation convergence to target is compatible with moderate and gradual easing of monetary conditions although further rate cuts will depend on factors that raise confidence the inflation will converge to target. The central bank targets inflation at 4.5 percent ± 2 percent.