During the third quarter of 2020, the year-over-year variation of Brazilian´s GDP moderated its contraction with respect to the previous quarter and stood at a rate of -3.92%. The y/y growth rate of industrial production also increased with respect to the previous quarter, nevertheless, it continued to register a negative growth rate of -0.62%. Regarding the labor market, the unemployment rate for the third quarter of 2020 increased up to 14.27%, while the y/y employment growth rate continued falling, down to a rate of -12.40%. The Brazilian real appreciated slightly against the dollar, bringing the exchange rate to 5.38 R$/USD. Finally, inflation stood at 2.63%, following an increase compared to the previous quarter.

 


Macroeconomic outlook report: Brazil 3Q20

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Macroeconomic overview

  • During the third quarter of 2020, the year-over-year variation of Brazilian´s GDP moderated its contraction by 7.02 p.p. with respect to the previous quarter and stood at a rate of -3.92%. This partial recovery of the economic activity was mainly due to the easing of sanitary measures, favoring industrial production, private consumption and investment.
  • Industrial production increased its year-on-year growth rate by 18.61 p.p. compared to the previous quarter. Nevertheless, it continued to register a negative growth rate of -0.62%.
  • Regarding the labor market, the unemployment rate increased by 1.34 p.p. with respect to the previous quarter, reaching 14.27% in 3Q20. On the other hand, the year-over-year employment growth rate decreased by 5.18 p.p. with respect to the previous quarter and stood at -12.40%.
  • The exchange rate decreased by 0.01 real per dollar with respect to the previous quarter, registering an average exchange rate of 5.38 R$/USD in 3Q20, which meant an appreciation of the real against the dollar.
  • The Brazilian inflation rate increased by 0.49 p.p. with respect to the second quarter, standing at 2.63% and below the BCB's average target range for 2020.

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