BRAZIL ECONOMICS
Analysts
Alexandre Schwartsman
Former Central Bank Deputy Governor
Cristina Pinotti
Former Chief Economist, DIVESPDatabanks
Recent Country Insights
Not alone in the driver’s seat
BRAZIL ECONOMICS · Report · 04 Feb 2025
The minutes of the last Copom meeting displayed a harsher tone compared to the statement released last week but kept open the next steps after the March meeting. For now, the indication of another 1 percentage point increase still stands.
A coy central bank in the face of inflation?
BRAZIL ECONOMICS · Report · 03 Feb 2025
Recent data suggests an unfavorable inflationary trend, marked by the acceleration of its underlying measures. Our forecast points to an inflation rate of 5.8% in 2025, above the level recorded in 2024 and, therefore, also above the tolerance limit for the inflation target. We use our semi-struct...
Playing with fire
BRAZIL ECONOMICS · Report · 30 Jan 2025
As announced at the end of last year, the Central Bank’s Monetary Policy Committee (Copom) raised the target for the benchmark interest rate to 13.25% per year and maintained its guidance for another hike of the same magnitude in the next meeting.
Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 27 Jan 2025
OVERVIEW OSTENSIBLE FRAILTY Still reeling from the impact of the emergency brain surgery he underwent in December to drain a hematoma caused by a fall in October, Lula, at 79, has confided to aides that he may lack the health to run in the 2026 election. What was visible to external obser...
Not so fast
BRAZIL ECONOMICS · Report · 20 Jan 2025
Monthly activity indicators point to a certain slowdown in the economy in the fourth quarter of 2024. Given the restrictive monetary policy and a possibly reduced fiscal impulse, we expect the cooling of economic activity to persist in 2025, with GDP projected to grow by 2.2%. However, we are mon...
The consequences of reaching above the limit
BRAZIL ECONOMICS · Report · 13 Jan 2025
The reduction in the trade balance surplus in 2024 is largely explained by import performance. We estimated a model to project the growth of imported quantum, aiming to analyze its relationship with economic growth and movements in the real exchange rate. The model indicates that a 1% increase in...
Upside down
BRAZIL ECONOMICS · Report · 20 Dec 2024
In recent weeks, suspicions that we are operating under a fiscal dominance regime, or very close to it, have surfaced. However, we still do not believe this to be the case, despite monetary policy weakening in face of fiscal policy mismanagement, which has rapidly increased the costs of disinflat...
The dance of solitude
BRAZIL ECONOMICS · Report · 17 Dec 2024
The Copom minutes, a laborious document, revealed a worrisome view of inflation. In the Committee's words: "that a further deterioration in the inflation scenario has occurred, as reflected in inflation expectations and projections. It concluded that the shorter-term determinants – such as the...
Bad moon rising
BRAZIL ECONOMICS · Report · 16 Dec 2024
Our fears, expressed in the September Quarterly Outlook, regarding the overheating of the economy, have materialized. Today, there are more signs that the economy is operating above its potential—a phenomenon acknowledged by the Central Bank itself. It revised its estimates of the output gap f...