BRAZIL ECONOMICS
Analysts
Alexandre Schwartsman
Former Central Bank Deputy Governor
Cristina Pinotti
Former Chief Economist, DIVESPDatabanks
Events
Recent Country Insights
This side of the horizon
BRAZIL ECONOMICS · Report · 25 Aug 2025
The appreciation of the exchange rate in 2025 has had impacts on inflation, chiefly in the category of tradable goods. It is true that much of the disinflation in this group is explained by food prices, whose behavior depends on variables beyond the exchange rate, but there are also signs of a sl...
Not so fast
BRAZIL ECONOMICS · Report · 18 Aug 2025 · 2 responses
Despite successive adjustments, the output gap estimated by the Central Bank (BC) has shown little sensitivity to the unemployment rate in recent years. This behavior could be justified by a rapid decline in the NAIRU over the period. However, when estimating it implicitly from the BC’s reference...
The Phillips curve is alive and well
BRAZIL ECONOMICS · Report · 11 Aug 2025
With the renewed decline in the unemployment rate, labor earnings, which are already growing significantly above productivity, are expected to face new pressures. Our estimates, based on pre-pandemic data, indicate that a 1 percentage point change in the economy’s slack, whether through an in...
Credit where credit is due
BRAZIL ECONOMICS · Report · 06 Aug 2025
The Copom minutes revive the curious formula of the “continuation of the interruption of the rate hiking cycle,” reaffirming the end of monetary tightening without stating it outright. This is, after all, a continuation of the decision made in June, which helps explain the scarcity of significant...
Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 04 Aug 2025
OVERVIEW UNCERTAINTY IS THE NAME OF THE GAME The 50% tariff rise on U.S. imports of Brazilian products caused a rupture in diplomatic relations between the two countries, triggering the most acute political and economic crisis since Brazil’s redemocratization. Following Trump’s election,...
Sizing up the trouble
BRAZIL ECONOMICS · Report · 31 Jul 2025
In a decree published this Wednesday, President Donald Trump raised the tariff on Brazilian products to 50%. Attached to the decree was a list of 694 products that will be exempt from the new tariff, including items such as orange juice, petroleum derivatives, certain steel products, cellulose, a...
The pause continued
BRAZIL ECONOMICS · Report · 31 Jul 2025
As expected, the Central Bank’s Monetary Policy Committee (Copom) kept the benchmark interest rate target at 15% per year. At the same time, however, in a curious grammatical construction, it stated that: “If the expected scenario materializes, the Committee foresees a continuation of the inte...
Selic, default, and consumption: what to expect?
BRAZIL ECONOMICS · Report · 29 Jul 2025
Consumption shows signs of slowing down in the second quarter, indicating that contractionary monetary policy is possibly already taking effect. The increase in the interest rate occurs in a scenario of high household indebtedness, which should exert additional pressure on default rates. Our ...
On the other hand...
BRAZIL ECONOMICS · Report · 21 Jul 2025
Economic activity shows signs of slowing down in the second quarter, which would suggest a narrowing of the output gap. However factor utilization is moving in the opposite direction: unemployment is declining and capacity utilization on the rise. One possible explanation for this divergence ...