brazil economic focus | june 2016
TRANSCRIPT
2
1. Lagging indicators continue to show economic deterioration
UNCLASSIFIED
Real wages falling and unemployment rising
Apr-15
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
1,920
1,940
1,960
1,980
2,000
2,020
2,040
0
2
4
6
8
10
12
Labour Market
Unemployment (%) Average real income (R$)
4
2. But some of them might have reached the bottom
UNCLASSIFIED
*Jun 2005 = 100
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
78
80
82
84
86
88
90
92
94
Industrial Employment*
Industries have stopped dismissing…
*Index number seasonally adjusted
Apr-15
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
80
82
84
86
88
90
92
94
Industrial Production*
...and their production stopped declining
*Index number seasonally adjusted
Apr-15
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
100
102
104
106
108
110
112
114
Retail Sales Index*
While retail sales maintain a regular trend
3. Leading indicators show that growth may resume soon
8OFFICIAL
Perception of Brazil has improved with the change in the government
Jan Feb Mar Apr May Jun300
350
400
450
500
550
5-Years Credit Default Swaps (base points)
Confidence indexes have shown increase
Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-1689
90
91
92
93
94
95
Compound Leading Indicator of the Economy (IACE)*
*(IACE) includes Ibovespa points, several confidence indexes, exports, trade terms, and production of durable goods (index number 2010 = 100)
Employment is expected to increase in the future
*Index number seasonally adjusted (Jun 2008 = 100)
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
60
65
70
75
80
85
Leading Employment Indicator*
Industrials feel more confident about the economy
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-162830323436384042444648
Industrial entrepreneur confidence index*
Brazil Sao Paulo
*The Index range is from 0 to 100. Values higher than 50 indicate positive evolution of the indicator
Consumers are willing to spend more
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
94
96
98
100
102
104
106
Consumer Expectation Index*
* Fixed base index
Helping to recover confidence in the services sector
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
64
66
68
70
72
74
76
Services sector confidence index (index number)
While exchange rates continue to boost exports
Jan-16 Feb-16 Mar-16 Apr-16 May-1610
11
12
13
14
15
16
17
18
3.103.203.303.403.503.603.703.803.904.004.10
Exports & Exchange Rate
US$/BRL Exports (USD billion)
4. Forecasts show a better outlook for the future
16OFFICIAL
Inflation decreases
May-15
Jun-15Jul-1
5
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
8.0
8.5
9.0
9.5
10.0
10.5
11.0
Inflation % (cumulative 12 months)
Market projects lower interest rates in the near future...
Jan Feb Mar Apr May Jun11.011.512.012.513.013.514.014.515.015.5
Future Interest Rates (%)
SELIC for December 2016 SELIC for June 2017
...and foresees a lower downturn in 2016
Jan Feb Mar Apr May Jun
-4.1
-3.9
-3.7
-3.5
-3.3
-3.1
-2.9
Projections for GDP Growth in 2016*
*Focus Research
Key Macroeconomic Indicators
Monthly Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16
Inflation (12 mth. accum.) 10.67 10.71 10.36 9.39 9.28 9.32
Benchmark Interest Rate 14.25 14.25 14.25 14.25 14.25 14.25
Unemployment (%) 9.72 9.93 10.00 10.20 10.62 10.8%
Trade Balance (US$ bn.) 6.2 0.9 3.0 4.4 4.8 6.4
Exports (US$ bn.) 16.8 11.2 13.3 16.0 15.4 17.5
Imports (US$ bn.) 10.5 10.3 10.3 11.6 10.5 11.1
Quarterly 2016 Q1 Q2 Q3 Q4
GDP (% var. QoQ) -0.3