Brazil Monthly Economic Report

June 2024

  • By
  • Jun 04, 2024
  • EM Latam Brazil
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  1. Government
  • Fiscal scenario is concerning again
  • Government continues saying it will meet the fiscal target, but market maintains its more pessimistic assessment
  • Several points to monitor to see if a revision for a worse outcome is necessary


  1. Economic Activity
  • GDP grew 0.8% in the first quarter
  • The impact of the flood in Rio Grande do Sul state will reduce growth in the second quarter
  • But, the reconstruction effort will benefit growth in the following quarters
  • GDP might grow 2.0% in the whole 2024


  1. Monetary Policy
  • Copom reduced the cutting pace to 25bps
  • A final 25bps cut in June meeting to 10.25% is likely
  • The Selic policy rate might end 2024 at 10.25% and 2025 at 9.25%


  1. External Sector
  • BRL depreciated in May
  • The uncertainty about the monetary policy in the US and the increased fiscal risk explain the outcome
  • But, BRL tends to appreciate when FED start cutting rates in the US

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