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AICEP
Agência para o Investimento e Comércio Externo de Portugal

CABEÇALHO

The economy entered a technical recession in Q3 as GDP shrank marginally for the second quarter running.

The economy entered a technical recession in Q3 as GDP shrank marginally for the second quarter running. The domestic economy fared relatively well, with consumer spending rebounding as the health crisis situation improved through the period. However, externally, falling agricultural production likely contributed to a sharp downturn in exports, dragging the overall GDP result into contraction. Turning to Q4, activity likely remains muted. Consumer sentiment remained pessimistic in October–November and averaged lower than its Q3 level, pointing to subdued private consumption. Meanwhile, business confidence declined in the same period, and the manufacturing PMI fell into contractionary territory, albeit only marginally, in November. Moreover, a continued rise in inflation in October and recent interest rate hikes are likely weighing on momentum in the final stretch of the year.
 
Brazil Economic Growth
GDP is estimated to grow at the slowest rate in the region in 2022, as consumer and capital spending decelerate and export growth eases from this year’s projected jump. Moreover, a weak fiscal position, a heavy debt burden and political polarization could weigh on activity in the new year, while uncertainty over the spread of new Covid-19 strains further clouds the outlook. FocusEconomics analysts see the economy expanding 1.2% in 2022, which is down 0.4 percentage points from last month’s forecast, and 1.9% in 2023.
 
Brazil Economy Data
2015 2016 2017 2018 2019
Population (million) 203 205 207 208 210
GDP per capita (USD) 8,827 8,774 9,973 9,040 8,760
GDP (USD bn) 1,796 1,800 2,063 1,885 1,839
Economic Growth (GDP, annual variation in %) -3.5 -3.3 1.3 1.3 1.1
Domestic Demand (annual variation in %) -6.3 -4.8 1.5 1.9 1.7
Consumption (annual variation in %) -3.2 -3.8 2.0 2.1 1.8
Investment (annual variation in %) -13.9 -12.1 -2.6 3.9 2.2
Industrial Production (annual variation in %) -8.3 -6.6 2.9 0.8 -1.1
Retail Sales (annual variation in %) -4.2 -6.6 2.5 2.3 1.8
Unemployment Rate 8.5 11.5 12.7 12.3 11.9
Fiscal Balance (% of GDP) -10.2 -9.0 -7.8 -7.1 -5.9
Public Debt (% of GDP) 65.5 69.8 73.7 76.5 75.8
Money (annual variation in %) 6.8 4.8 5.5 10.4 8.7
Inflation Rate (CPI, annual variation in %, eop) 10.7 6.3 2.9 3.7 4.3
Inflation Rate (CPI, annual variation in %) 9.0 8.7 3.4 3.7 3.7
Inflation (PPI, annual variation in %) 11.3 7.7 -2.5 8.8 9.6
Policy Interest Rate (%) 14.25 13.75 7.00 6.50 4.50
Stock Market (annual variation in %) -13.3 38.9 26.9 15.0 31.6
Exchange Rate (vs USD) 3.96 3.25 3.31 3.88 4.02
Exchange Rate (vs USD, aop) 3.34 3.48 3.19 3.65 3.95
Current Account (% of GDP) -3.0 -1.3 -0.7 -2.2 -2.7
Current Account Balance (USD bn) -54.5 -24.2 -15.0 -41.5 -49.5
Trade Balance (USD billion) 19.5 47.6 67.0 58.0 48.0
Exports (USD billion) 191 185 218 239 225
Imports (USD billion) 171 138 151 181 177
Exports (annual variation in %) -15.1 -3.0 17.5 9.9 -5.8
Imports (annual variation in %) -25.2 -19.8 9.6 20.2 -2.1
International Reserves (USD) 356 365 374 375 357
External Debt (% of GDP) 18.6 18.1 15.4 17.0 17.6

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