March 20, 2024

Brazil Policy Rate 10.75% (consensus 10.75%) in Mar-24

  • Copom reduced the Selic rate by 0.5pp to 10.75%, matching expectations, in response to the global economy's continued volatility and persistent domestic inflation pressures.
  • Future policy decisions will be influenced by the evolution of global and domestic inflationary pressures, labour market conditions, and the pace of economic activity deceleration.
  • The Committee's unanimous commitment to further potential rate cuts aims to consolidate the disinflation process and achieve long-term price stability.

January 31, 2024

Brazil Policy Rate 11.25% (consensus 11.25%) in Jan-24

  • The Banco Central do Brasil Copom cut the Selic rate to 11.25%, a move in line with consensus forecasts, amid a complex global economic scenario with ongoing inflationary challenges and labour market pressures.
  • While domestic economic indicators suggest a deceleration, the disinflationary trajectory and the closing gap towards inflation targets provide a basis for the current rate cut, with monetary policy remaining firmly contractionary.
  • Future interest rate decisions will be influenced by the trajectory of global economic conditions, the impact of fiscal policy on inflation expectations, and the balance of risks surrounding inflation dynamics and economic activity.

January 11, 2024

Brazil IPCA Inflation 4.62% y-o-y (consensus 4.5%) in Dec-23

- Brazil's IPCA inflation rate for December 2023 slowed slightly to 4.62% y-o-y, surpassing the consensus estimate of 4.5%.
- With this upside surprise, inflation remains close to the average of the past year, suggesting that progress towards the inflation target may have stalled.

December 20, 2023

Brazil Economic Activity Growth -0.06% m-o-m (consensus 0.1) in Oct-23

- Brazil's economic activity contracted by 0.06% in October 2023, missing the consensus estimate of 0.1% growth.
- The current contraction is the third consecutive one. It is also 0.14 percentage points worse than the one-year average and 0.22 percentage points below the long-run average, indicating a historically poor performance.