During the first quarter of 2021, the year-over-year growth rate of Brazil's GDP stood at 2.26%, following the partial recovery that started in the third quarter of 2020. The year-over-year growth rate of industrial production also increased from the previous quarter to a growth rate of 5.14%.  Regarding the labor market, the unemployment rate for the first quarter of 2021 was 14.43%, accelerating when compared to the fourth quarter of 2020. The Brazilian real depreciated slightly against the dollar, bringing the exchange rate to 5.47 R$/USD. Finally, inflation stood at 5.29%, following an increase compared to the previous quarter.

 


Macroeconomic outlook report: Brazil 1Q21

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Macroeconomic overview

  • The year-on-year growth rate of Brazilian GDP stood at 2.26% after an increase of 3.48 p.p. with respect to the previous quarter. This recovery in GDP was mainly due to the easing of sanitary measures, the increase in industrial production, investments and private consumption. Industrial production increased its year-on-year growth rate by 1.76 p.p. with respect to the previous quarter, registering a growth of 5.14%.
  • Regarding the labor market, the unemployment rate increased by 0.33 p.p. with respect to the previous quarter, standing at 14.43% in 1Q21.
  • The exchange rate increased by 0.07 reals per dollar with respect to the previous quarter, registering an average exchange rate of 5.47 R$/USD in 1Q21.
  • The Brazilian inflation rate increased in 1Q21 by 1.04 p.p. with respect to 4Q20, standing at 5.29%, above the BCB's average target range for 2021 of 3.75%.

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