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Slide Presentation - Brazil 2024 Macro Outlook
BRAZIL ECONOMICS · Report · 16 Nov 2023

Get insight into Brazil's macro outlook for 2024, including how effective Brazil's fiscal framework will be and what impact the country's monetary policy will have on interest rates by the end of the easing cycle—all with the slide presentation from our "Brazil 2024 Macro Outlook" webinar.

The 2020 Depreciation, Foreign Exchange Flows and Trade Balance
BRAZIL ECONOMICS · Report · 13 Nov 2023

The minutes of the last COPOM meeting stated that “at upcoming meetings” the easing pace of 50 basis points per meeting will be maintained, so it is certain that the SELIC rate will be lowered to 11.25% at the meeting in January. However, thereafter the Central Bank will have to use the “art in t...

The Lula of 2003 and the Lula Of 2023: From Pragmatism to Populism
BRAZIL ECONOMICS · Report · 06 Nov 2023

In this report, we compare the objectives and the motivations – economic and political – underpinning the fiscal policy in two Lula administrations. The first (Lula 1), starting in 2003, was marked by an acute crisis of confidence, prompting Lula to be temporarily pragmatic, unconditionally accep...

Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 30 Oct 2023

Fiscal discipline doesn’t sit well with either Lula or the Centrão parties. Without a government policy to put the country on the path to sustainable economic growth, with his popularity sinking and dependence growing on the Centrão to win approval of any measures in Congress, Lula has abandoned ...

Fiscal Space and Debt Sustainability
BRAZIL ECONOMICS · Report · 26 Oct 2023

Fiscal space, defined as the government’s flexibility in choosing to increase spending, is a concept closely tied to the sustainability of the public debt. Countries where the real interest rate is lower than the rate of economic expansion have greater fiscal space than countries in which the rea...

Slower Growth
BRAZIL ECONOMICS · Report · 23 Oct 2023

Since peaking in April 2023, the IBC-Br has been decelerating, and in August it declined by 0.8% (Graph 1), confirming the information on the lower real retail sales, in both the restricted (0.2%) and augmented definitions (1.3%). In turn, services declined by 0.9%, while industry grew by 0.4%. A...

What do the Yield Curves Say?
BRAZIL ECONOMICS · Report · 16 Oct 2023

In the past four weeks, the nominal yield curve (based on the DI rate) has shifted steadily upward. That movement can be partly attributed to the continuous upward shift of the real yield curve, combined with the same upward movement of the implicit inflation rates. We attribute the rising real i...

Interest Rates in the United States and the Consequences in Brazil
BRAZIL ECONOMICS · Report · 10 Oct 2023

Against a backdrop of a still heated economy and tight labor market, the indication that the interest rate will remain “higher for longer” in the US does not exclude the possibility of further elevation. The resilience of the American economy to the Fed’s tighter monetary policy is a consequen...

Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 02 Oct 2023

Evidence is mounting that Brazil is facing a more severe fiscal problem than was assumed at the start of the year, due to the fragility of the fiscal framework as a brake on spending by the executive and legislative branches. The country seems fated to suffer from inefficient spending, with littl...

COPOM, Neutral Interest Rate and Potential GDP
BRAZIL ECONOMICS · Report · 25 Sep 2023

In the statement issued after the last COPOM meeting, the Central Bank pledged to maintain cuts of 50 basis points per meeting until the end of the year, with the SELIC rate reaching 11.75%. It also warned of the effects of the increase of the neutral interest rate in the United States on Brazil’...

Fiscal Expansion and the Monetary Policy Error of 2019
BRAZIL ECONOMICS · Report · 18 Sep 2023

With the unemployment rate below 8% and strong expansion of household consumption, Brazil’s economy can only be classified as heated. But in light of the looming difficulties of meeting the primary result target for 2024, the government wants to maintain GDP growth, with a corresponding increase ...

Fiscal Expansion and Its Consequences on Monetary Policy
BRAZIL ECONOMICS · Forecast · 11 Sep 2023

With the approval of the fiscal framework, the government will guarantee an increase in spending in real terms of 2.5% in 2024, and in an interval between 0.6% and 2.5% in 2025 and 2026. At the same time, primary result targets have been established of zero in 2024 and surpluses of 0.5% and 1.0% ...

Synthesis of the Brazilian Economy
BRAZIL ECONOMICS · Report · 05 Sep 2023

The approval of the fiscal framework and the first round of the tax reform have left “debts” that have been negotiated in a type of arm-wrestling match between Lula and Lira, with results increasingly favorable to the latter’s objectives, as expected. The retribution for the approvals has entaile...

United States and China
BRAZIL ECONOMICS · Report · 28 Aug 2023

With the end of the pandemic, the Chinese and American economies are facing challenges. In the United States, the huge monetary and fiscal stimuli that boosted the economy have generated the highest inflation in the past 40 years, prompting the Federal Reserve to drastically tighten monetary poli...

The (Mis)trust in the Quality of the Fiscal Framework
BRAZIL ECONOMICS · Report · 21 Aug 2023

With the modifications made in the Senate, the text of the fiscal framework has returned to the Chamber of Deputies for approval, so the final wording is still unknown. Nevertheless, it is already known that the increase, in real terms, of primary spending (to occur in an interval between 0.6% an...

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