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Macroeconomic outlook report: Brazil

First quarter of 2018

During the first quarter of 2018, the y/y growth rate of Brazilian GDP stood at 1.56%, after registering a deceleration of 0.81 p.p. with respect to the previous quarter. The y/y growth rate of industrial production decelerated to 3.13% in this period. With regard to the labor market, the unemployment rate increased by 1.30 p.p. to 13.10%. On the other hand, the y/y growth rate of employment decelerated, although continued in a positive growth, of 0.40%. The Brazilian real appreciated with respect to the dollar in this quarter, reaching 3.24 R$/USD. Lastly, inflation stood at 2.79% in 1Q18, after decreasing by 0.03 p.p. with respect to the previous quarter.

Macroeconomic overview

  • Brazilian GDP y/y growth rate experienced a deceleration of 0.81 p.p. during the first quarter of the year with respect to 4Q17, registering a rate of 1.56%. The main driver of this behavior was the slower y/y growth registered by both private consumption and investment in comparison to the fourth quarter of 2017, of 0.37 p.p. to 2.90% and 0.02 p.p. to 2.79%, respectively.  
  • Industrial production stood at 3.13% in 1Q18, after a deceleration of 2.20 p.p. when compared to the previous quarter.  
  • Regarding the labor market, the unemployment rate stood at 13.10% in the first quarter of 2018, which represented an increase of 1.30 p.p. when compared to the previous quarter. The employment creation registered in 1Q18 a y/y growth rate of 0.40%, after a deceleration of 0.06 p.p. when compared to the previous quarter.
  • The exchange rate of the Brazilian real in this period was 3.24 R$/USD, which represented an appreciation of 0.01 R$/USD when compared to the previous quarter.
  • Inflation recorded in 1Q18 a rate of 2.79%, after a decrease of 0.03 p.p. when compared to 4Q17, 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).