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Macroeconomic outlook report: Brazil

Fourth quarter of 2018

During the last quarter of 2018, the y/y growth rate of Brazilian GDP stood at 1.13%, after registering a deceleration of 0.15 p.p. with respect to the previous quarter. The y/y growth rate of industrial production decelerated to -1.27% in this period. With regard to the labor market, the unemployment rate decreased by 0.30 p.p. to 11.60%. On the other hand, the y/y growth rate of employment accelerated, continuing in a positive growth, of 1.35%. The Brazilian real appreciated with respect to the dollar in this quarter, reaching 3.81 R$/USD. Lastly, inflation stood at 4.12% in 4Q18, after decreasing by 0.28 p.p. with respect to the previous quarter.

Macroeconomic overview

  • Brazilian GDP y/y growth rate experienced a deceleration of 0.15 p.p. during the last quarter of the year with respect to 3Q18, registering a rate of 1.13%. The main driver of this behavior was the slower y/y growth registered by domestic demand, after public consumption as well as investment decelerated in comparison to the third quarter of 2018. Industrial production stood at -1.27% in 4Q18, after a deceleration of 1.81 p.p. when compared to the previous quarter. 
  • Regarding the labor market, the unemployment rate stood at 11.60% in the last quarter of 2018, which represented a decrease of 0.30 p.p. when compared to the previous quarter. The employment creation registered in 4Q18 a y/y growth rate of 1.35%, after an acceleration of 0.30 p.p. when compared to the previous quarter.
  • The exchange rate of the Brazilian real in this period was 3.81 R$/USD, which represented an appreciation of 0.15 R$/USD when compared to the previous quarter.
  • Inflation recorded in 4Q18 a rate of 4.12%, after a decrease of 0.28 p.p. when compared to 4Q18, standing inside the target set by the Central Bank of Brazil, of 4.50% ± 1 p.p.

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