Scenario Review - Brazil
|
|
- Elijah Griffin
- 6 years ago
- Views:
Transcription
1 Scenario Review - Brazil January 2013 Unsteady State Intervention in the foreign-exchange market reveals that the economic policy goals and preferences may change, as could interest rates over the coming months We have revised the path for the exchange rate throughout 2013, but have not changed our yearend forecast of 2.15 reais per dollar. We continue to expect interest-rate cuts in March and April, with the benchmark SELIC rate at 6.25% by year-end. However, we acknowledge the increased likelihood that the exchange and SELIC rates will remain unchanged throughout The recent advance in inflation and government signals (as well as actual moves, in the case of foreign exchange) point in that direction. A less-depreciated exchange-rate path caused us to lower our trade-balance estimate for 2013, to $18 billion from $20 billion. We raised our consumer price index (IPCA) estimate for 2013, to 5.6% from 5.5%, due to the withdrawal of the IPI tax break on automobiles. We maintained our GDP growth estimates at 0.9% in 2012 and 3.2% in Our forecast for a primary budget surplus in 2013 also remains unchanged, at 2.1% of GDP. The exchange rate: a change in signals and actions Real: Path and BCB Interventions reais per dollar Sell dollar (swap) 2.00 Buy dollar (reverse swap) 1.98 Jun-12 Aug-12 Oct-12 Dec-12 Source: BCB, Bloomberg, Itaú In December, policymakers changed again their signals regarding the desired path for the exchange rate. Given likely concerns about inflation, the government and the central bank acted against further depreciation, easing controls on foreign capital inflows (see Macro Vision: U- Turn) and resuming sales in the derivatives market (swaps). These moves prompted a 4% gain by the Brazilian real against the U.S. dollar, despite the largest outflow of foreign currency since 2008 ($6.8 billion). This behavior indicates that economic policy actions and the desired level for some variables are not in a steady state. There is more uncertainty regarding the evolution of the exchange rate. On one hand, the fundamentals suggest a stronger rate than now (in the absence of additional domestic savings) and an additional weakening of the currency could put further pressure on inflation. On the other hand, there have been signals that a weaker exchange rate is considered part of the policymakers toolbox for increasing competitiveness and boosting growth. Therefore, our scenario now forecasts the exchange rate holding at around 2.05 reais per dollar throughout the first half of 2013, before it tips into gradual depreciation to 2.15 by the end of We previously assumed that the rate would be 2.15 by the beginning of We believe that the signals and actions related to the currency market have been intense, increasing the chances of a scenario in which the exchange rate stays around the current level for longer than we assume in our base-case scenario. Regarding the balance of payments, the trade balance ended 2012 at $19.4 billion, consolidating a Please refer to the last page of this report for important disclosures, analyst and additional information. Itaú Unibanco or its subsidiaries may do or seek to do business with companies covered in this research report. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should not consider this report as the single factor in making their investment decision.
2 year of decline in the trade surplus, which fell from $29.8 billion in A drop of 4% in the terms of trade in 2012 stood out as one of the key drivers for the slowdown in the trade balance last year. For 2013, we have lowered our trade balance estimate to $18 billion from $20 billion, due to a stronger average exchange rate and a worse outlook for soybean prices than in our scenario. We estimate that foreign direct investment ended 2012 at $63 billion. Despite the positive surprise of the November figure ($4.4 billion), a weaker preliminary reading for December FDI ($2 billion through December 14) suggests that our estimate is still valid. For 2013, we stand by our forecast of $64 billion in FDI. As for the current account deficit, we have adjusted our forecast for 2012 to 2.3% of GDP from 2.2%; for 2013, we have also adjusted our call slightly, to 2.4% of GDP from 2.2%, based on forecasts of a lower trade surplus and a wider deficit in services and income. Rebound in economic activity remains moderate 90% 80% 70% 60% 50% 40% 30% 20% Weak Economic Activity in November but Expansion in December % of indicators with positive change in the month, sa 3mma Monthly Historical average The economy continues to grow, but at a moderate pace. After rising in October (the Itaú Unibanco monthly GDP index rose by 0.5%, and the central bank s economic activity index, the IBC-Br, climbed by 0.4%), the data point to weakening economic activity in November and a pick up in December. There was a broad-based reduction in economic activity in November: a broad dataset showed that more indicators were going down than going up. For December, early signs show improvement, with broader-based growth. 10% Industrial production fell by 0.6% in November, Jan-10 Aug-10 Mar-11 Oct-11 May-12 Dec-12 and growth was probably slower in 4Q12 than in Source: Itaú the previous quarter. The drop in investment stood out. Domestic absorption of machinery and equipment slid by 3.6% mom/sa in November, influenced by the fourth consecutive decline in the production of capital goods and by a contraction in imports of these items. Our estimates point to a 2.8% drop at the margin in gross fixed capital formation and a decline of 1.9% in the quarter ended in November. In other words, there is still no rebound in investment. Available data suggest that the economy resumed growth in December. The withdrawal of the IPI tax break for autos starting in January prompted higher sales in December (5.8% mom/sa). Electricity usage and confidence among industrial entrepreneurs also advanced. But weakness in November and the pick up in December are in line with our scenario. Therefore, we have maintained our GDP growth forecast for 4Q12 at 0.7% qoq/sa. Our GDP growth forecasts for 2012 and 2013 remain at 0.9% and 3.2%, respectively. There is one risk for GDP growth in 4Q12 which is unusual. For statistical reasons, a slightly positive surprise in the year-over-year growth rate may cause a leap in growth compared with 3Q12. The inclusion or exclusion of an outlier in 4Q08 produces a significant change in the seasonal adjustment for GDP (for instance, if the economy grows 1.6% yoy the outlier is included in the seasonal-adjustment model, but if GDP grows 1.8% the outlier stays out of the model). These seasonal-adjustment changes would drive 4Q12 growth to a level of 1.2% qoq/sa in the event of a small upward deviation from our yoy growth forecast (1.6%). Thus, the natural perception would be of a much stronger rebound in economic activity than contemplated in the 0.7% forecast. However, this figure would possibly be revised downward later, thus leaving unchanged the scenario of a moderate recovery in economic activity. Page 2
3 In the credit market, new bank loans were relatively stable in November, amid signs of a retreat in consumer delinquencies. New consumer loans rose by 1.2% mom/sa in real terms, recovering from the drop in the previous month (-1.9%). New corporate loans fell by 2.3% during the month, in a second consecutive decline (-2.1% in October). The three-month moving averages for new consumer loans as well as corporate loans are virtually stable. Total outstanding loans are still expanding (1.5%), particularly earmarked credit transactions. The consumer delinquency rate for loans over 90 days past due fell by a seasonally-adjusted 0.1 pp, to 7.8%, marking the first slide since March. The corporate delinquency rate was stable at 4.1%. Interest rates and spreads went down again for consumers and companies. The prospect of a retreat in delinquencies is favorable to credit expansion ahead. In December, the central bank authorized the use of a share of reserve requirements on deposits to finance purchases of machinery, equipment, trucks, buses and other items. The decision formalized the expansion of resources available to the Investment Support Program (or PSI, in its Portuguese acronym) to 100 billion reais, out of which 85 billion reais will come from state development bank BNDES and 15 billion from freed reserve requirements. The measures seek to boost investment. Labor market data remain positive, with the unemployment rate remaining at a historically low level that is below our estimated equilibrium rate. Thus, real average income and the real wage bill have remained on a steady upward path, a trend which we expect to continue in 2013, though at a somewhat slower pace. Expansionary fiscal bias creates downside risks to the primary budget surplus in 2013 The public sector posted a primary budget deficit of 5.5 billion reais (1.4% of GDP) in November, the worse reading for the month in the series calculated by the central bank (since 2002). The fiscal target for 2012 was threatened, even after deductions for expenditures within the Growth Acceleration Program (PAC). A strong result, around 25 billion reais (close to 7% of monthly GDP), would be needed in December to meet the adjusted target for the year. The signs are that this strong result will materialize through extraordinary revenues (such as new dividend payments by state-owned banks, following new capital injections by the Treasury, in addition to money withdrawn from the Sovereign Wealth Fund). The volume of atypical inflows in the last days of 2012 is estimated at about 21 billion reais (0.5% of GDP), ensuring an accounting primary budget surplus close to 2.5% of GDP (vs. 3.1% in 2011). The recurring result, which excludes only atypical budget transactions, should be around 1.8% of GDP (vs. 2.7% in 2011). New tax cuts for 2013 were announced in December. The break on payroll taxes was extended to construction and retail companies, in addition to other fiscal benefits granted to the construction sector. A gradual return of the IPI (tax on industrial products) was announced for automobiles and other durable goods, as well as a reduction in personal income taxes on profit-sharing. The government also included in the budget bill exemptions from new tax rates that will be implemented by the new legislation for PIS/Cofins. In order to ensure the legal viability of recent and future tax breaks, the government submitted to Congress a bill to change the Fiscal Responsibility Act (2000) and allow tax benefits to be granted based on excess revenues forecasted for the year. Previously, the law dictated that tax exemptions could only take place through spending cuts or increases in other revenues. Overall, there will be an additional volume of 18 billion reais (0.4% of GDP) in revenue losses in 2013, totaling about 50 billion reais (1.0% of GDP) for the year (we had already contemplated this assumption in our scenario). Our calculations indicate that there is no more room for new tax breaks. From now on, further tax reductions should be accompanied by lower spending (possibly Page 3
4 on investments, where there is more room for adjustment) or by a lower fiscal target (for instance, with more room for PAC-related deductions). 6% 5% 4% 3% 2% 1% 0% Falling Structural Primary Fiscal Balance % of GDP -1% Mar-99 Mar-02 Mar-05 Mar-08 Mar-11 Our estimates for the structural primary budget surplus also suggest that there is little room for new stimulus measures, in case the fiscal targets in the budget law are not changed. We estimate that the fiscal result, adjusted for the economic cycle, asset prices and non-recurring transactions, was around 1.0% of GDP in 2Q12 and 3Q12, compared with about 2.0% throughout This implies that the fiscal policy stance became more expansionary starting in 2Q12, which would be consistent with a primary surplus below the adjusted target throughout the cycles. Source: BCB, Itaú We maintain our forecast for a primary surplus of 2.1% of GDP for 2013, which is consistent with a structural result of 1.0% of GDP. On one hand, we are lowering our estimate for the primary surplus of regional governments (to 0.5% of GDP from 0.7%), incorporating faster execution of investments by some states, thanks to the replacement of the index that adjusts their debt with the federal government (which could free up 15 to 30 billion reais to the states). On the other hand, we are forecasting a larger volume of extraordinary revenues which, as in 2012, could be used to meet the adjusted target in We note that there are downside risks for government intake, whether due to a slower rebound in activity or to a bigger-than-expected impact from revenue losses. Therefore, there are downside risks to the fiscal result this year. The end of the IPI tax break for autos leads to small adjustment in the inflation forecast for 2013 We have slightly increased our forecast for the IPCA in 2013, to 5.6% from 5.5%, due to the end of the IPI tax break for autos. The IPI tax will come back gradually, with the rate for vehicles with 1.0 engines rising to 2% in January, 3.5% in April and 7% in July. Our previous scenario assumed a partial resumption of the tax, but only over the second half of the year. Downward-pushing drivers for inflation in 2013 will come from food prices (contained grain prices) and housing prices (discount on electricity tariff). The main upward-pushing driver will come from transportation prices, with expected pressure from public transportation, vehicle ownership and fuel. 0.9% 0.8% 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% Inflationary Pressure in the Short Run IPCA Monthly variation Over 12 months (rhs) 0.0% Jan-12 Jun-12 Nov-12 Apr-13 Sep-13 Source: IBGE, Itaú 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% Following a pick up in December, the IPCA is likely to remain under pressure in January. Starting in February, the effect of the decline in electricity costs (-0.5 pp impact on the IPCA) should create some relief. Upward pressure throughout 1Q13 (from adjustments in urban bus fares, gasoline, new cars, cigarettes and school tuitions) will likely prevent a deeper cool-down in inflation. We also expect sharper increases in food and clothing prices compared with early On the one hand, monthly inflation should show some improvement throughout 1Q13; on the other hand, inflation over 12 months will likely remain on the rise, reaching about 6.3% by the end of the period. Page 4
5 For the general price index known as IGP-M, we have maintained our 2013 forecast of 4.8%, vs. 7.8% in Significant relief on the IGP should come from lower producer prices, particularly agricultural prices. Better behavior on the part of the exchange rate and grain prices, amid favorable weather conditions, should enable a smaller change in the IPA agricultural price index, following a hike of 18.8% in An upside risk to our inflation scenario is a full dispatch of energy from thermal plants for a longer period than expected (a year instead of two months). Regarding this assumption, energy prices would decline less than considered in our scenario, which would add between 0.1 pp and 0.2 pp to our IPCA forecast in We continue to expect a drop in the benchmark interest rate, but the odds of stability have increased Even with weak results for 3Q12 GDP, members of the monetary policy committee (Copom), in official speeches and in the December Inflation Report, reiterated their signal of stability in monetary conditions for a sufficiently-prolonged period. The current inflation pressure and heated labor market are helping to support the assertive and conservative stance by the Copom. In fact, there are more risks to our scenario of a reduction in the benchmark rate in The government has signaled some comfort with the pace of rebound in economic activity (despite its expansionary reaction on the fiscal and credit sides following the publication of the 3Q12 GDP figure) and there were no significant surprises in the growth figures. The news was more inflation pressure, as well as a shift in activity in the foreign exchange market towards showing greater concern with the inflation picture. Externally, the risks of a greater negative effect from fiscal policy on U.S. growth have receded. These elements suggest lower downside risks to domestic economic activity, higher inflation in the short term and less reaction from economic policy. However, we understand that the Brazilian economy is still recovering at only a moderate pace. Even in our base-case scenario, in which there is a rebound, growth would still be fragile and any negative surprise may push expansion in 2013 to below 3.0%. Furthermore, though inflationary pressures are currently higher, we expect some relief in the monthly readings starting in February. As it was the case with the exchange rate, the signals and the desired level of interest rates may change, and the Copom may choose to lower the SELIC rate again. Our forecast is for two 50-bp cuts, in March and April, driving the SELIC to 6.25%, and then a stable rate until at least the end of Page 5
6 Forecast: Brazil F 2013F Economic Activity Real GDP growth - % Nominal GDP - BRL bn 2,661 3,032 3,239 3,770 4,143 4,414 4,875 Nominal GDP - USD bn 1,367 1,652 1,620 2,142 2,473 2,258 2,330 Per Capita GDP - USD 7,428 8,874 8,600 11,228 12,853 11,639 11,916 Unemployment Rate - year avg Inflation IPCA - % IGP M - % Interest Rate Selic - eop - % Balance of Payments BRL / USD - Dec Trade Balance - USD bn Current Account - % GDP Foreign Direct Investment - % GDP International Reserves - USD bn Public Finances Primary Balance - % GDP Nominal Balance - % GDP Net Public Debt - % GDP Source: IMF, IBGE, BCB, Haver and Itaú Macro Research at Itaú Ilan Goldfajn Chief Economist Adriano Lopes Artur Passos Aurelio Bicalho Caio Megale Carlos Eduardo Lopes Elson Teles Felipe Salles Fernando Barbosa Gabriela Fernandes Giovanna Siniscalchi Guilherme Martins João Pedro Bumachar Juan Carlos Barboza Luiz G. Cherman Luka Barbosa Mariano Ortiz Villafañe Mauricio Oreng Roberto Prado Tel: macroeconomia@itaubba-economia.com Click here to visit our digital research library. Page 6
7 Relevant information 1. This report has been prepared and issued by the Macro Research Department of Banco Itaú Unibanco S.A. ( Itaú Unibanco ). This report is not a product of the Equity Research Department of Itaú Unibanco or Itaú Corretora de Valores S.A. and should not be construed as a research report ( relatório de análise ) for the purposes of the article 1 of the CVM Instruction NR. 483, dated July 06, This report aims at providing macroeconomics information, and does not constitute, and should not be construed as an offer to buy or sell, or a solicitation of an offer to buy or sell any financial instrument, or to participate in any particular trading strategy in any jurisdiction. The information herein is believed to be reliable as of the date on which this report was issued and has been obtained from public sources believed to be reliable. Itaú Unibanco Group does not make any express or implied representation or warranty as to the completeness, reliability or accuracy of such information, nor does this report intend to be a complete statement or summary of the markets or developments referred to herein. Opinions, estimates, and projections expressed herein constitute the current judgment of the analyst responsible for the substance of this report as of the date on which it was issued and are, therefore, subject to change without notice. Itaú Unibanco Group has no obligation to update, modify or amend this report and inform the reader accordingly. 3. The analyst responsible for the production of this report, whose name is highlighted in bold, hereby certifies that the views expressed herein accurately and exclusively reflect his or her personal views and opinions and were prepared independently and autonomously, including from Itaú Unibanco, Itaú Corretora de Valores S.A. and other group companies. 4. This report may not be reproduced or redistributed to any other person, in whole or in part, for any purpose, without the prior written consent of Itaú Unibanco. Additional information on the financial instruments discussed in this report is available upon request. Itaú Unibanco and/or any other group companies is not, and will not be liable for any investment decisions (or otherwise) based on the information provided herein. 5. Banco Itaú BBA International SA is authorised and regulated by Banco de Portugal. Banco Itaú BBA International,S.A. headquarters are located in Portugal at Rua Tierno Galvan, Torre 3, 11º Andar - Lisbon. Banco Itaú BBA International, S.A., London branch, located at The Broadgate Tower, Level 20, 20 Primrose Street, London EC2A 2EW is regulated by the Financial Services Authority (FRN ) for the conduct of UK business (FSA Register: Itaú BBA International, S.A., overseas financial branches located in Madeira is authorised and regulated by Banco de Portugal. Banco Itaú BBA International, S.A. also has representative offices in France, Germany and Spain which are authorized to conduct certain activities. In France, the representative office is located at 68, 32, Rue Monceau, Niveau 10, Bâtiment Messine Nord, Paris, 75008, Paris, The business activities conducted by the Paris office are regulated by Banque de France. In Germany, the representative office is located at Bockenheimer Landstraße 47, Frankfurt am Main, The business activities conducted by the Frankfurt office are regulated by Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin). In Spain, the representative office is located at Calle Pinar 7, 2º Derecha, Madrid, The business activities conducted by the Madrid office are regulated by Banco de España. Additional Note to reports distributed in: (i) U.K. and Europe: Itau BBA UK Securities Limited, authorised and regulated by the Financial Services Authority (FSA), is distributing this report to investors who are Eligible Counterparties and Professional Clients, pursuant to FSA rules and regulations. If you do not, or cease to fall within the definition of Eligible Counterparty or Professional Client, you should not rely upon the information contained herein and should notify Itau BBA UK Securities Limited immediately. The information herein does not apply to, and should not be relied upon by retail customers. Investors wishing to purchase or otherwise deal in the securities covered in this report should contact Itau BBA UK Securities Limited at Level 20 The Broadgate Tower, 20 Primrose Street, London EC2A 2EW, UK; (ii) U.S.A: Itau BBA USA Securities, Inc., a FINRA/SIPC member firm, is distributing this report and accepts responsibility for the content of this report. Any US investor receiving this report and wishing to effect any transaction in any security discussed herein should do so with Itau BBA USA Securities, Inc. at 767 Fifth Avenue, 50th Floor, New York, NY 10153; (iii) Asia: This report is distributed in Hong Kong by Itaú Asia Securities Limited, which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities) regulated activity. Itaú Asia Securities Limited accepts all regulatory responsibility for the content of this report. In Hong Kong, any investors wishing to purchase or otherwise deal in the securities covered in this report should contact Itaú Asia Securities Limited at 29th Floor, Two IFC, 8 Finance Street Central, Hong Kong; (iv) Japan: This report is distributed in Japan by Itaú Asia Securities Limited Tokyo Branch, Registration Number (FIEO) 2154, Director, Kanto Local Finance Bureau, Association: Japan Securities Dealers Association; (v) Middle East: This report is distributed by Itaú Middle East Limited. Related financial products or services are only available to wholesale clients with liquid assets of over $1 million and who have sufficient financial experience and understanding to participate in financial markets in a wholesale jurisdiction. The information herein does not apply to, and should not be relied upon by retail customers. Itaú Middle East Limited is regulated by the Dubai Financial Services Authority (DFSA). In the Middle East, any investors wishing to purchase or otherwise deal in the securities covered in this report should contact Itaú Middle East Limited, at Al Fattan Currency House, Suite 305, Level 3, DIFC, PO Box , Dubai, United Arab Emirates; (vi) Brazil: Itaú Corretora de Valores S.A., a subsidiary of Itaú Unibanco S.A authorized by the Central Bank of Brazil and approved by the Securities and Exchange Commission of Brazil, is distributing this report. If necessary, contact the Client Service Center: * (capital and metropolitan areas) or (other locations) during business hours, from 9 a.m. to 8 p.m., Brasilia time. If you wish to re-evaluate the suggested solution, after utilizing such channels, please call Itaú s Corporate Complaints Office: (on business days from 9 a.m. to 6 p.m., Brasilia time) or write to Caixa Postal , São Paulo-SP, CEP * Cost of a local call. Page 7
Brazil: FX and Capital Markets Highlights of the Week
Brazil: FX and Capital Markets Highlights of the Week Monday, April 7, 1 Currency flow remains positive Brazilian currency maintained the good performance of the previous weeks. The real kept last week
More informationReleased last Friday, industrial production came at 3.57% year-on-year in August, weaker than market estimates (3.8) and higher than our call (2.5).
LatAm Talking Points LatAm Talking Points: Mexican Manufacturing Declines in August Talk of the Day Mexico Released last Friday, industrial production came at 3.57% year-on-year in August, weaker than
More informationBrazil: FX and Capital Markets Highlights of the Week
Brazil: FX and Capital Markets Highlights of the Week Monday, May 11, 1 International Market Reopens for Brazilian Issuances Brazilian currency appreciated again last week. Notwithstanding some depreciation
More informationBrazil Review. Depreciation of the Real Sharpens. The Brazilian Economy in March 2015
Brazil Review Wednesday, April 01, 2015 Depreciation of the Real Sharpens The Brazilian Economy in March 2015 GDP growth reached 0.1% in 2014. The latest confidence and employment indicators showed a further
More informationRecovery Disappoints, Real Depreciates
Brazil Review Monday, December 03, 2012 Recovery Disappoints, Real Depreciates The Brazilian economy in November 2012 The economic recovery disappointed in the third quarter, increasing the doubts about
More informationFX and Capital Markets
FX and Capital Markets Highlights of the Week November, 1 Domestic and international drivers pressure the BRL Brazilian currency underperformed its peers last week Improved data on the U.S. economy released
More informationFX and Capital Markets
FX and Capital Markets Highlights of the Week June, 7 Weaker U.S. labor market boosts the BRL Brazilian currency rebounds Weaker figures on the U.S. labor market undermined the dollar against many currencies,
More informationSector Insights. Autos. Sales Performance Remains Strong. Passenger Cars and Light Commercial Vehicles
Sector Insights Tuesday, May 28, 2013 Autos Sales Performance Remains Strong Following all-time-high sales of passenger cars and light commercial vehicles in 2012, which were stimulated by government incentives,
More informationFX and Capital Markets
FX and Capital Markets Highlights of the Week May, 7 BRL outperforms peer currencies during the week BRL remains virtually stable in a week of emerging market currencies depreciation Falling commodity
More informationMacro Vision June 13, 2017
Macro Vision June 13, 2017 Country risk: how far can it reach? The global environment has been favorable to emerging markets, despite the recent drop in commodity prices. Better global growth and lower
More informationMacro Brazil July 21, 2017
Macro Brazil July 21, 2017 Copom Cockpit: The disinflationary scenario prevails The Brazilian Central Bank's Monetary Policy Committee (Copom) will meet again next week. Recent data pictures an environment
More informationPublic Sector Posts a Primary Deficit in May
Brazil Monday, June 30, 2014 Public Sector Posts a Primary Deficit in May Highlights The public sector posted a primary deficit of 11.0 billion real in May, the lowest for the month in the series started
More informationMacro Vision February 20, 2017
Macro Vision February 20, 2017 Finding MXN equilibrium in more challenging conditions Traditional exchange rate models indicate that the Mexican peso is undervalued. When presenting the results, we are
More informationMacro Vision October 2, 2017
Macro Vision October 2, 2017 How the TLP can impact monetary policy In this report, we estimate that, when fully implemented, the new long-term interest rate (TLP) will allow a reduction of about 2.2 p.p.
More informationBrazil Review. Rising Concerns about Inflation. The Brazilian economy in February 2013
Brazil Review Friday, March 01, 2013 Rising Concerns about Inflation The Brazilian economy in February 2013 The Central Bank reinforced its message against inflation, saying that the interest rate is the
More informationMarkets Stabilize, GDP Grows 2.3% in 2013
Brazil Review Monday, March 03, 2014 Markets Stabilize, GDP Grows 2.3% in 2013 The Brazilian economy in February 2014 Financial markets have stabilized, with appreciation of the Brazilian real and a decline
More informationWeakening Fiscal Performance in the 1Q14
Brazil Wednesday, April 30, 2014 Weakening Fiscal Performance in the 1Q14 Highlights The public sector s primary budget surplus was slightly better than expected in March (actual: 3.6 billion real; consensus:
More informationMacro Research Economic outlook
Macro Research Economic outlook Macroeconomic Research Itaú Unibanco December 2017 Roadmap Global Economy Solid global growth and higher interest rates in 2018 We expect global growth to continue at 3.8%
More informationScenario Review - Brazil
Scenario Review - Brazil August 8, 2017 Tougher fiscal challenges The tax hike is not enough to meet the primary budget target, which will still require extraordinary revenues and other compensatory measures
More informationCommodities Monthly Review
Commodities Monthly Review March 9, 2016 We forecast higher oil and lower iron ore prices Iron-ore prices rose to USD 60/ton from USD 40/ton, but fundamentals for the sector still point to the downside,
More informationLatAm Talking Points: Brazilian Economic Activity Edges Up in October
LatAm Talking Points LatAm Talking Points: Brazilian Economic Activity Edges Up in October Talk of the Day Brazil Out this morning, the Central Bank s economic activity index gained 0.36% seasonallyadjusted
More informationIU-MCI measures the market conditions and is also a good leading indicator of economic growth in the country, as indicated by econometric exercises.
Macro Vision Tuesday, September, 5 Itaú Unibanco Market Conditions Index We present the Itaú Unibanco Market Conditions Index IU-MCI for the Brazilian economy. IU-MCI measures the market conditions and
More informationMacro Vision July 25, 2016
Macro Vision July 25, 2016 Is Brazil coming out of the recession? Leading indicators already show some positive signs for activity. Does this mean that the economy is already coming out of the recession?
More informationBrazil Review March 1, 2018
Brazil Review March 1, 2018 Central Bank near the end of the easing cycle The Brazilian economy in February 2018 The Central Bank reduced the benchmark Selic interest rate by 25 bps to 6.75% and signaled
More informationMacro Research Economic outlook
Macro Research Economic outlook Macroeconomic Research Itaú Unibanco January 2018 Roadmap Global Economy Goldilocks scenario continues Global growth to remain at 3.8% in 2018. Growth in developed countries
More informationCommodities Monthly Review
Commodities Monthly Review Monday, December 02, 2013 Higher Iron Ore, Lower Crude Oil Prices We are raising our iron ore price forecasts due to stronger-than-expected demand and lower capacity from high-cost
More informationMacro Research Economic outlook
Macro Research Economic outlook Macroeconomic Research Itaú Unibanco April 2018 Roadmap Global Economy Global growth on track, trade risk to fade Global growth has kept up a good pace, supported by easy
More informationBrazil Review. U-Turn in Exchange Rate Policy. The Brazilian economy in December 2012
Brazil Review Wednesday, January 02, 2013 U-Turn in Exchange Rate Policy The Brazilian economy in December 2012 The Brazilian economy proved to be harder to manage, with simultaneous concerns involving
More informationDaniel Scioli leads the race to the presidency in October, but a runoff with Mauricio Macri in November is likely.
Latam in Depth Wednesday, September 09, 2015 ARGENTINA The day after Daniel Scioli leads the race to the presidency in October, but a runoff with Mauricio Macri in November is likely. The new administration
More informationScenario Review - Brazil
Scenario Review - Brazil June 9, 2017 A setback for reforms and a more challenging scenario A more turbulent political scene tends to delay reforms in Congress, making fiscal rebalancing more difficult
More informationMacro Research Economic outlook
Macro Research Economic outlook Macroeconomic Research Itaú Unibanco August 2017 Roadmap Global Economy Positive environment for emerging markets continues Global growth remains solid. We revised our GDP
More informationBrazil Review June 1, 2018
Brazil Review June 1, 2018 Truckers strike on the spotlight The Brazilian economy in May 2018 The government approved several measures to end the truck driver s strike, with negative fiscal impact. GDP
More informationCommodities Monthly Review
Commodities Monthly Review June 2015 Lower agricultural prices despite El Niño Aggregate commodity prices have declined 2.7% since the end of April. We expect a 5.3% increase from current levels by year-end,
More informationElectoral Polls: Datafolha
Macro Research Electoral Polls: Datafolha January -, 1 Datafolha Polls Summary 1. Voting Intentions First Round. Rejection Rates First Round. Voting Intentions by region. Voting Intentions by income. Voting
More informationMacro Vision December 16, 2016
Macro Vision December 16, 2016 Brazilian states in crisis: diagnosis and solutions The financial crisis in the Brazilian states is structural and was caused by growing expenses, uncoordinated and badly
More informationMacro Vision December 12, 2016
Macro Vision December 12, 2016 FAQs: Social Security Reform (PEC 287) The Brazilian government recently sent to Congress a Social Security reform proposal (PEC 287), the next step in the structural fiscal
More informationGlobal Monetary Policy Monitor
Global Monetary Policy Monitor Thursday, December, Brazil and Indonesia are the exception In November, 6 countries announced monetary policy decisions, six of them changing the monetary policy rate. The
More informationBrazil Review March 1, 2017
Brazil Review March 1, 2017 Congress debates Social Security Reform The Brazilian economy in February 2017 The Lower House Special Committee began its analysis of the Social Security Reform. The government
More informationCommodities Monthly Review
Commodities Monthly Review Thursday, November 01, 2012 General Decline Fading global optimism and higher supply led to falling commodity prices. Most commodity prices fell in October, as optimism about
More informationReal Estate The pace of sales continues to fall in the residential market. The number of launches came down, but inventories remain high.
Brazil Orange Book July 2015 No signs of stabilization With information through July 06, 2015 This report, published six times per year, summarizes anecdotal information on current economic conditions
More informationLabor Market, Production Costs and Prices Faced with low growth, the appetite for hiring is low, and more sectors are announcing forced vacations.
Brazil Orange Book Monday, July 07, 2014 Weak Consumption, Production falls With information through July 3, 2014 This report, published six times per year, summarizes anecdotal information on current
More informationMacro Vision June 13, 2017
Macro Vision June 13, 2017 ECB: The tricky road to monetary policy normalization The Euro Area growth has improved, but inflation needs time to catch up. This scenario allows the ECB to recognize that
More informationScenario Review Brazil
Scenario Review Brazil August 2014 Activity Stalls; Inflation Wanes We have lowered our 2014 GDP growth forecast to 0.6% from 0.7%, given the apparent slowness of economic activity recovery after the World
More informationThe Itaú Social Well-Being Index
Macro Vision Monday, April 16, 2012 The Itaú Social Well-Being Index Summary: We constructed an indicator for Brazil taking into consideration not only economic factors, but also human factors and income
More informationGlobal Monetary Policy Monitor
Global Monetary Policy Monitor January 017 Lower interest rates in South America In January, monetary policy decisions took place in 15 of the 33 countries that we monitor. On the tightening side, Turkey
More informationBrazil Currency Perspectives
, on. November 29 Brazil Currency Perspectives Research Ana Esteves + 351 21 381 19 ana.esteves@itaueuropa.pt María Insausti + 351 21 381 1149 maria.insausti@itaueuropa.pt Bruno Baptista + 351 21 381 1136
More informationEconomic Outlook January, 2012
Economic Outlook January, 2012 Summary Global economy Low global growth scenario, tail risks have become smaller. Risks (Debt Ceiling, elections in Italy, growth in Europe). Brazil Activity shows signs
More informationEconomic Outlook. Macro Research Itaú Unibanco
Economic Outlook Macro Research Itaú Unibanco June, 2013 Agenda Economia Global Heterogeneous growth: U.S. growing faster, Europe in recession. Deceleration in the emerging economies. The Fed signals a
More informationScenario Review Chile
Scenario Review Chile September 4, 2017 Sluggish growth persists Activity in the first half of the year confirmed that the Chilean economy is still slumbering. Investment remains a drag on activity as
More informationEconomic Outlook. Macroeconomic Research Itaú Unibanco
Economic Outlook Macroeconomic Research Itaú Unibanco March 2015 Overview International Global growth on the rise. U.S. interest rates will soon follow U.S. economic fundamentals remain solid. Rates are
More informationMacro Research Economic outlook
Macro Research Economic outlook Macroeconomic Research Itaú Unibanco April 2017 Roadmap Global Economy The global outlook remains favorable Global growth positive momentum continues, with a synchronized
More informationMacro Vision August 30, 2017
Macro Vision August 30, 2017 Reforms could bring Brazil s potential GDP to 3.5% We have estimated Brazil s potential GDP based on the evolution of the economy since 1961. A fiscal adjustment that increases
More informationThe peace deal advances, while the economy slows
Latam in Depth Monday, October, 1 The peace deal advances, while the economy slows The fall of oil prices are reducing economic growth in Colombia, weakening the exchange-rate and worsening external and
More informationMacro Vision. Uncertain Recoupling Road for Latin America
Macro Vision Thursday, January 23, 2014 Uncertain Recoupling Road for Latin America From 2010 to 2013, emerging markets (EM) became the main engine of global growth, decoupling from advanced nations. Apparently,
More informationMacro Vision June 13, 2018
Macro Vision June 13, 2018 2018 FIFA World Cup Russia : Who has the greatest chances of winning? During the next few weeks, billions will direct their eyes toward Russia, the country hosting the 2018 World
More informationGlobal Monetary Policy Monitor
Global Monetary Policy Monitor March 017 Interest rate paths diverge in Latin America In April, there were monetary policy decisions in 19 of the 33 countries we monitor. The number of central banks cutting
More informationMacro Vision November 23, 2017
Macro Vision November 23, 217 Argentina Facing the moderate inflation challenge While the Central Bank of Argentina has made progress in fighting inflation since 21, consumer prices continue expanding
More informationSector Insights. Brazil s Steel Industry: Still a Challenging Scenario Ahead
Sector Insights Monday, August 05, 2013 Brazil s Steel Industry: Still a Challenging Scenario Ahead Low global growth and high inventories are constraining international and domestic steel prices, limiting
More informationGlobal Monetary Policy Monitor
Global Monetary Policy Monitor July 01 Less stimulus than expected In July, there were monetary-policy decisions in 0 of the 31 countries we monitor. Three countries increased stimulus, but only one, Malaysia,
More information1- Macroeconomic Scenario
PREVI NOVARTIS MONTHLY REPORT May 15, 2014 1- Macroeconomic Scenario The economic recovery has been consolidating in the United States and Europe. In emerging markets, the momentum is positive but growth
More informationLatAm Macro Monthly. Page
LatAm Macro Monthly Scenario Review October 2014 Global Economy Stronger U.S. dollar, now relative to emerging markets 3 Perspective of higher interest rates in the US, falling commodity prices, concerns
More informationPREVI NOVARTIS MONTHLY REPORT February 14, Macroeconomic Scenario
PREVI NOVARTIS MONTHLY REPORT February 14, 2014 1- Macroeconomic Scenario The outlook for global growth keeps improving. This scenario is benign, but not without risks to the emerging countries, including
More informationGlobal Monetary Policy Monitor
Global Monetary Policy Monitor October 01 Few movements in October, still expansionary In October, there were monetary policy decisions in 17 of the 33 countries we monitor. The global trend remains expansionary.
More informationEconomic activity gathers pace
Produced by the Economic Research Unit October 2014 A quarterly analysis of trends in the Irish economy Economic activity gathers pace Positive data flow Recovery broadening out GDP growth revised up to
More informationPREVI NOVARTIS MONTHLY REPORT. 1- Macroeconomic Overview. September,
1- Macroeconomic Overview FED has strengthened the possibility of an interest hike this year. In Brazil, Copom maintained the interest rate stable, but set the terms for a cut in the coming months. Internacional
More informationEurozone Economic Watch Higher growth forecasts for January 2018
Eurozone Economic Watch Higher growth forecasts for 2018-19 January 2018 Eurozone Economic Watch January 2018 Eurozone: Higher growth forecasts for 2018-19 Our MICA-BBVA model estimates a broadly stable
More informationChallenges to monetary policy in the EMEs
Challenges to monetary policy in the EMEs A view into the Brazilian Case Governor of the Banco Central do Brasil Ilan Goldfajn November 18th, 2017 Outline Benign international conditions and Emerging Markets
More informationY qué está pasando en Brasil?
Y qué está pasando en Brasil? Ilan Goldfajn Chief Economist and Partner, Itaú Unibanco August, 2013 Summary Why has the Brazilian economy decelerated? The low growth and full employment paradox (new middle
More informationMexico Economic Outlook 3Q18. August 2018
Mexico Economic Outlook 3Q18 August 2018 Key messages Global growth continues, but risks are intensifying. The economy grew 2.1% in the first half of the year. Downward bias in our growth forecast for
More informationBNM Maintains OPR at 3.25%, Hawkish About Economic Outlook
7 March 2018 ECONOMIC REVIEW March 2018 BNM MPC BNM Maintains OPR at 3.25%, Hawkish About Economic Outlook Overnight Policy Rate maintained at 3.25%. In line with our expectation, overnight policy rate,
More informationEurozone. Economic Watch FEBRUARY 2017
Eurozone Economic Watch FEBRUARY 2017 EUROZONE WATCH FEBRUARY 2017 Eurozone: A slight upward revision to our GDP growth projections The recovery proceeded at a steady and solid pace in, resulting in an
More informationECONOMIC REPORT. Cost reduction and investment are key to resume economic growth. Brazilian economy in the third quarter of 2012
ECONOMIC REPORT Newsletter of the National Confederation of Industry Year 28 Number 03 July/September 2012 www.cni.org.br Cost reduction and investment are key to resume economic growth Brazilian economy
More informationThe real change in private inventories added 0.22 percentage points to the second quarter GDP growth, after subtracting 0.65% in the first quarter.
QIRGRETA Monthly Macroeconomic Commentary United States The U.S. economy bounced back in the second quarter of 2007, growing at the fastest pace in more than a year. According the final estimates released
More informationEurozone Economic Watch. July 2018
Eurozone Economic Watch July 2018 Eurozone: A shift to more moderate growth with increased downward risks BBVA Research - Eurozone Economic Watch July 2018 / 2 Hard data improved in May but failed to recover
More informationMacro Vision August 4, 2017
Macro Vision August 4, 2017 Labor reform: Potential impacts In international comparisons, Brazil has one of the world s most inefficient labor markets. This report discusses aspects that make the Brazilian
More informationLatAm Macro Monthly. Page
LatAm Macro Monthly Scenario Review February 2016 Global Economy Central banks react; Risks remain 3 The major central banks are reacting to financial markets turbulence. This action should maintain financial
More informationJan-Mar st Preliminary GDP Estimate
Japan's Economy 20 May 2015 (No. of pages: 5) Japanese report: 20 May 2015 Jan-Mar 2015 1 st Preliminary GDP Estimate Economic recovery confirmed in two major aspects of domestic demand Economic Intelligence
More informationChina and Hong Kong Forex Market Developments RMB made the nine-month peak and FX reserves further expanded
China and Hong Kong Forex Market Developments RMB made the nine-month peak and FX reserves further expanded August 217 Monthly publication Alicia Garcia Herrero Chief Economist Asia Pacific +852 39-868
More informationB-GUIDE: Economic Outlook
Aug-12 Apr-13 Dec-13 Aug-14 Apr-15 Dec-15 Aug-16 Apr-17 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 Jul-17 Quarterly Economic Outlook: Quarter 4 2017 4 January 2018 B-GUIDE: Economic Outlook The economy
More informationFlash Economics. What must we assume if we do not believe long-term interest rates will rise sharply in the peripheral eurozone
December - 7 What must we assume if we do not believe long-term interest rates will rise sharply in the peripheral eurozone countries? If we believe a sharp rise in long-term interest rates in the peripheral
More informationBRAZIL. 1. General trends
Economic Survey of Latin America and the Caribbean 2017 1 BRAZIL 1. General trends Brazil s economic performance indicates that obstacles remain on the path back to growth. After declining in the past
More informationPPI Contracted for Two Consecutive Months as Prices Fell Further For Agriculture
30 March 2018 ECONOMIC REVIEW February 2018 Producer Price Index Contracted for Two Consecutive Months as Prices Fell Further For Agriculture Producer prices continued to fall for two consecutive months.
More informationLatin America: the shadow of China
Latin America: the shadow of China Juan Ruiz BBVA Research Chief Economist for South America Latin America Outlook Second Quarter Madrid, 13 May Latin America Outlook / May Key messages 1 2 3 4 5 The global
More informationMain Economic & Financial Indicators Hungary
Main Economic & Financial Indicators Hungary 6 AUGUST 2015 NAOKO ISHIHARA ECONOMIST ECONOMIC RESEARCH OFFICE (LONDON) T +44-(0)20-7577-2179 E naoko.ishihara@uk.mufg.jp The Bank of Tokyo-Mitsubishi UFJ,
More informationMain Economic & Financial Indicators Poland
Main Economic & Financial Indicators Poland. 6 OCTOBER 2015 NAOKO ISHIHARA ECONOMIST ECONOMIC RESEARCH OFFICE (LONDON) T +44-(0)20-7577-2179 E naoko.ishihara@uk.mufg.jp The Bank of Tokyo-Mitsubishi UFJ,
More informationContents. HSBC Group in the world. HSBC in Brazil. New Economic Scenario / Macroeconomic Forecasts
HSBC GLOBAL & LOCAL STRATEGY IN A NEW ECONOMIC SCENARIO Conrado Engel CEO & President of HSBC Bank Brasil 26 March 2010 The British Chamber of Commerce and Industry in Brazil - São Paulo 0 Contents HSBC
More informationPortuguese Banking System: latest developments. 2 nd quarter 2017
Portuguese Banking System: latest developments nd quarter 17 Lisbon, 17 www.bportugal.pt Prepared with data available up to th September of 17. Portuguese Banking System: latest developments Banco de Portugal
More informationPREVI NOVARTIS MONTHLY REPORT. 1- Macroeconomic Overview. October 17, 2016
1- Macroeconomic Overview Domestic Outlook: recovery in sight, but sustained growth depends on reforms. Internacional Global economy remains stable, with steady yet low growth. US continue to show moderate
More informationBrazil. Mauricio Oreng Senior Brazil Strategist Aug-17. Macroeconomic outlook. Marketing communication
Mauricio Oreng Senior Brazil Strategist Aug-17 Brazil Macroeconomic outlook Marketing communication Brazil s worst recession on record... 12 10 % real annual growth 8 6 4 2 0 GDP forecast 2017: 0.1% -2
More informationMonitorING Turkey ING BANK A.Ş. Further fiscal support in the Medium Term Plan. Emerging Markets 4 October 2017
q ING BANK A.Ş. ECONOMIC RESEARCH GROUP MonitorING Turkey October 17 Emerging Markets October 17 USD/TRY MonitorING Turkey Further fiscal support in the Medium Term Plan In 17, accelerated spending and
More informationShort-term indicators and Updated Forecasts. Eurozone NOVEMBER 2016
Short-term indicators and Updated Forecasts Eurozone NOVEMBER 2016 EUROZONE WATCH NOVEMBER 2016 Key messages: resilience and unchanged projections The moderate pace of economic growth continued in the
More informationMonthly Economic Insight
Monthly Economic Insight Prepared by : TMB Analytics Date: 22 February 2018 Executive Summary Synchronized global economic growth continued to brighten global economic outlook and global trade outlook.
More informationThe real change in private inventories added 0.15 percentage points to the second quarter GDP growth, after subtracting 0.65% in the first quarter.
QIRGRETA Monthly Macroeconomic Commentary United States The U.S. economy rebounded in the second quarter of 2007, growing at an annual rate of 3.4% Q/Q (+1.8% Y/Y), according to the GDP advance estimates
More informationPortuguese Banking System: latest developments. 4 th quarter 2017
Portuguese Banking System: latest developments 4 th quarter 217 Lisbon, 218 www.bportugal.pt Prepared with data available up to 2 th March of 218. Macroeconomic indicators and banking system data are
More informationHas no impact on growth; Leads to a rise in interest rates;
April 7-7 What happens in the United States when there is a restrictive monetary policy combined with an expansionary fiscal policy? It now seems relatively clear that over the next two years there will
More informationGDP Forecast Revised Due to Weak Global Outlook
5 July 2016 MONTHLY ECONOMIC REVIEW Jun 2016 GDP Forecast Revised Due to Weak Global Outlook Exports were down by 0.9%yoy in May, while trade balance moderated to RM3.2 billion. This was largely due to
More informationRoger Yuan Goldman Sachs (Asia) L.L.C. (+852)
Goldman Sachs Research Precious Metals Gold caught in a tug-of-war May 2014 Roger Yuan Goldman Sachs (Asia) L.L.C. (+852) 2978-6128 roger.yuan@gs.com The Goldman Sachs Group, Inc. does and seeks to do
More informationOn public finances; On financial asset prices; The risks seem to come from:
May 7 - Would a rise in interest rates be dangerous in the United States? Financial markets expect a very small rise in interest rates, both shortterm and long-term, in the United States. This expected
More informationInflation Report. January March 2013
January March 2013 May 8, 2013 Outline 1 External Conditions 2 Economic Activity in Mexico 3 Monetary Policy and Inflation Determinants 4 Forecasts and Balance of Risks 2 External Conditions Global Environment
More informationGlobal growth fragile: The global economy is projected to grow at 3.5% in 2019 and 3.6% in 2020, 0.2% and 0.1% below October 2018 projections.
Monday January 21st 19 1:05pm International Prepared by: Ravi Kurjah, Senior Economic Analyst (Research & Analytics) ravi.kurjah@firstcitizenstt.com World Economic Outlook: A Weakening Global Expansion
More information