BRAZIL ECONOMICS
Analysts
Alexandre Schwartsman
Former Central Bank Deputy Governor
Cristina Pinotti
Former Chief Economist, DIVESPDatabanks
Recent Country Insights
COPOM Watch: "Make me chaste, but not yet.”
BRAZIL ECONOMICS · Report · 14 May 2024
The Minutes of the last Monetary Policy Committee (Copom) meeting, released today, carry even greater importance than usual, as they were expected to provide the motives behind the minority vote for a stronger reduction of the benchmark Selic rate, namely 0.50 pp, in opposition to the majority de...
Scope and Consequences of the Dissent in the COPOM
BRAZIL ECONOMICS · Report · 13 May 2024
The statement issued after the last COPOM meeting displayed a hawkish tone in evaluating both the international and domestic scenarios, recognizing that the dynamism of activity and the labor market in Brazil is stronger than expected. In addition to this, the members unanimously stated that the ...
COPOM Watch: The flight of the falcons
BRAZIL ECONOMICS · Report · 09 May 2024
As expected, the Monetary Policy Committee (COPOM) reduced the target SELIC rate by only 25 basis points at the last meeting, from 10.75% to 10.50%. However, the decision was not unanimous: all the Central Bank directors appointed by Lula voted to continue the cuts of 50 basis points per meeting,...
Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 06 May 2024
OVERVIEW ABUNDANCE OF ALERTS After a month of exhausting and ultimately futile friction with Congress, a melancholic manifestation summoned for Worker’s Day was added to an extensive list of alerts that President Lula has been receiving about the efficacy – and the costs – of his governing st...
Counting on Luck
BRAZIL ECONOMICS · Report · 29 Apr 2024
With the so-called New Fiscal Framework, the government hoped to gain credibility regarding the performance of public accounts through a promise to generate a dynamic of expenditures versus revenues consistent with stabilization of the federal debt. However, the fragility of its bases was evident...
When a Risk Becomes (Almost) Certainty
BRAZIL ECONOMICS · Report · 22 Apr 2024
In the statement following its last meeting, the COPOM changed its forward guidance, conditional on confirmation of its baseline scenario, to only one more cut of 50 basis points at the meeting in May, without any indications regarding subsequent meetings. Back then, in the minutes of that meetin...
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...