Brasília – The gradual recovery process of Brazilian economic activity has been interrupted recently, but it is expected to resume later. This is the conclusion of the Monetary Policy Committee (COPOM) of the Central Bank of Brazil (BC), which decided last Wednesday (8) to keep the benchmark interest rate (known as SELIC) at 6.5% per annum.
As per the COPOM meeting minute released this Tuesday (14), the cooling down of the activity seen in later 2018 have continued through early 2019. “Particularly the indicators available suggest a significant chance that the Gross Domestic Product (GDP) have undergone a slight year-on-year reduction in the first quarter, after seasonal patterns were taken into account,” says the document. GDP change will be known only when the Brazilian Institute of Geography and Statistics (IBGE) announces the numbers about the first quarter.
COPOM adds that the first quarter indicators have caused substantial revisions in financial institutes forecasts for GDP growth in 2019. “These revisions reflect a first quarter below expectations, which have implications for the “statistical load’ [heritage of what happened last year] but also places some reduction in the growth pace forecast for the next quarters,” it stresses.
Translated by Guilherme Miranda