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Brazil Policy Rate 11.75% (consensus 11.75%) in Dec-23

• The Banco Central do Brasil Copom's reduction of the Selic rate to 11.75% aligns with expectations and is indicative of a cautious yet responsive approach to a less adverse global economic outlook and domestic inflationary pressures.
• Copom's decision is based on a balanced assessment of risks, with a recognition of potential global persistent inflationary pressures and domestic output gap dynamics influencing future rate decisions.
• The Committee projects continued rate cuts, maintaining a contractionary stance to ensure inflation expectations are anchored and emphasizing fiscal discipline as critical to the conduct of monetary policy.

Brazil IPCA Inflation 4.68% y-o-y (consensus 4.7%) in Nov-23

- Brazil's November 2023 IPCA inflation rate of 4.68% y-o-y was broadly in line with the consensus expectation as it slowed back to the lowest since August 2023.
- This pace is also in line with the 1-year average, indicating predictable stability.

Brazil Consumer Credit Growth 0.1% m-o-m in Oct-23

- Brazil's consumer credit growth slowed to 0.1% month-on-month in October 2023, marking the lowest growth rate since July 2023.
- The current growth rate is 0.46 percentage points below the one-year average and 0.86 percentage points under the long-run average, indicating a deviation from the usual trend and potential strains on consumer borrowing and spending.

Brazil GDP Growth 2.0% y-o-y (consensus 1.9%) in Q3-23

- Brazil's GDP growth in Q3-23 registered a y-o-y increase of 2.0%, the lowest since Q4-22, on a quarterly growth of just 0.1%.
- Although the pace is 0.83 pp below the one-year average and 1.78 pp below the long-run average, signalling a persistent challenge in Brazil's economic performance, it was less bad than expected.