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Macroeconomic outlook report: Brazil

Second quarter of 2018

During the second quarter of 2018, the y/y growth rate of Brazilian GDP stood at 0.87%, after registering a deceleration of 0.38 p.p. with respect to the previous quarter. The y/y growth rate of industrial production decelerated to 0.27% in this period. With regard to the labor market, the unemployment rate decreased by 0.70 p.p. to 12.40%. On the other hand, the y/y growth rate of employment accelerated, continuing in a positive growth, of 0.81%. The Brazilian real depreciated with respect to the dollar in this quarter, reaching 3.61 R$/USD. Lastly, inflation stood at 3.34% in 2Q18, after increasing by 0.55 p.p. with respect to the previous quarter.

Macroeconomic overview

  • Brazilian GDP y/y growth rate experienced a deceleration of 0.38 p.p. during the second quarter of the year with respect to 1Q18, registering a rate of 0.87%. The main driver of this behavior was the slower y/y growth registered by domestic demand, after both private and public consumption as well as investment decelerated in comparison to the first quarter of 2018. 
  • Industrial production stood at 0.27% in 2Q18, after a deceleration of 2.86 p.p. when compared to the previous quarter.   
  • Regarding the labor market, the unemployment rate stood at 12.40% in the second quarter of 2018, which represented a decrease of 0.70 p.p. when compared to the previous quarter. The employment creation registered in 2Q18 a y/y growth rate of 0.81%, after an acceleration of 0.41 p.p. when compared to the previous quarter.
  • The exchange rate of the Brazilian real in this period was 3.61 R$/USD, which represented a depreciation of 0.37 R$/USD when compared to the previous quarter.
  • Inflation recorded in 2Q18 a rate of 3.34%, after an increase of 0.55 p.p. when compared to 1Q18, standing at the lower limit of the target set by the Central Bank of Brazil, of 4.50% +/- 2 p.p.

For more information access the executive document in pdf (avalaible in Spanish and Portuguese).