During the fourth quarter of 2020, the year-over-year growth rate of Brazil's GDP stood at -1.24%, following the partial recovery that started in the previous quarter. The year-over-year growth rate of industrial production also increased from the previous quarter to a positive growth rate of 3.32%. Regarding the labor market, the unemployment rate for the fourth quarter of 2020 was 14.10%, decelerating compared to the third quarter of 2020. The Brazilian real depreciated slightly against the dollar, bringing the exchange rate to 5.40 R$/USD. Finally, inflation stood at 4.25%, following an increase compared to the previous quarter.
Macroeconomic outlook report: Brazil 4Q20
- The year-on-year growth rate of Brazilian GDP stood at -1.24% after an increase of 2.68 p.p. with respect to the previous quarter. This partial recovery in GDP was mainly due to the easing of sanitary measures, the increase in industrial production, investments and public and private consumption.
- Industrial production increased its year-on-year growth rate by 3.94 p.p. with respect to the previous quarter, registering a growth of 3.32%.
- Regarding the labor market, the unemployment rate decreased by 0.17 p.p. with respect to the previous quarter, standing at 14.10% in 4Q20.
- The exchange rate increased by 0.02 reals per dollar with respect to the previous quarter, registering an average exchange rate of 5.40 R$/USD in 4Q20.
- The Brazilian inflation rate increased in 4Q20 by 1.62 p.p. with respect to 3Q20, standing at 4.25%, slightly above the BCB's average target range for 2020 of 4.00%.