Slower Growth

BRAZIL ECONOMICS - Report 23 Oct 2023 by Affonso Pastore, Cristina Pinotti, Paula Magalhães and Diego Brandao

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%. All told, the carry-over from the IBC-Br for the third quarter now stands at -0.6%, indicating a probable contraction of GDP in the third quarter and reducing growth for the year, which should fall shy of our initial projection of 3.1%.

On the aggregate demand side, the most important source of deceleration in August was household consumption, which occurred despite the still strong job market, with record levels of the occupied population and labor income. The increases of real income and income transfers were not sufficient to offset the effect of the higher household indebtedness, which increased the default rate to the same level as during the recession of 2014 to 2016. On the other hand, net exports grew strongly, partially counteracting the deceleration of aggregate demand.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.