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Brazil PPI inflation 0.92% m-o-m in Aug-23

- Brazil experienced a notable increase in Producer Price Index (PPI) inflation, reaching 0.92% month-on-month in August 2023, the highest growth since July 2022.
- The current PPI inflation rate surpasses both the 1-year average by 1.84 percentage points and the long-run average by 0.30 percentage points, indicating a potential shift in price dynamics in the Brazilian economy.

Banco Central do Brasil: Sep-23

• The Banco Central do Brasil's Copom's unsurprising decision to reduce the Selic rate by 0.5pp to 12.75% is influenced by both global uncertainties and domestic economic resilience, with an aim to converge inflation to targeted levels.
• Multiple risks, both upside and downside, concerning global inflationary pressures, resilience in services inflation, synchronized monetary tightening, and economic slowdown, shape the policy framework.
• Copom emphasizes the significance of a contractionary monetary policy, ensuring both short-term disinflation and long-term anchoring of inflation expectations, with future decisions being contingent on evolving macroeconomic dynamics.

Brazil retail sales 2.4% y-o-y (consensus 1.6) in Jul-23

- Brazil retail sales registered a robust 2.4% year-on-year growth in July 2023, surpassing market expectations and indicating a positive trajectory in consumer spending.
- While still slightly below the long-run average, the growth in retail sales showcases a recovery in the retail sector and contributes to Brazil's broader economic revival.

Brazil CPI inflation 4.61% y-o-y (consensus 4.7) in Aug-23

- Brazil's CPI inflation in August 2023 stood at 4.61% y-o-y, slightly below the consensus forecast of 4.7%, suggesting modest inflationary pressure.
- This marks the highest growth rate since March 2023, indicating a potentially concerning rebound.