the G1 the main indicators in the economy put together to reflect the scenario that the new president will find.
The bullishness that is still high in public accounts is regarded by analysts as the "Achilles heel" of the economy. Other weaknesses are the low growth of the gross domestic product (GDP) and the relatively high unemployment figures.
At the same time, the country has good figures in the external sector, driven by the positive balance of the trade balance. It also has high international reserves that provide protection for the Brazilian economy.
Other trump cards are the base rate at an annual low of 6.5% per year and well-raised inflation.
See details of the scenario that the new president should find in the economy:
According to official figures, the government accounts will register in 2018 for the fifth consecutive year of the deficit. The fiscal target for this year is a primary deficit (costs higher than revenues apart from public debt) of up to R $ 159 billion, which would mean a deterioration compared to the 2017 level (-R $ 124 billion). Analysts point out that the budget deficit may be lower than the target set for this year, namely R 148 billion.
Result of government accounts (in R $ billion)
Accounts have been in the red since 2014
Source: National Treasury Secretariat
Due to the deterioration of government accounts in recent years, the gross debt of the consolidated government sector (government, federal states, municipalities and state-owned enterprises) has increased in recent years. According to data from the Central Bank, gross debt reached the level of R $ 5,165 trillion in June, or 77.2% of GDP, a new historical record. According to the criteria used by the International Monetary Fund (IMF) for international comparison – where the bonds issued by the National Treasury are considered in the Central Bank's portfolio – this debt was even higher in June, up to 86.5%. GDP, well above average for emerging countries, of about 50% of GDP.
GROSS DEBT OF THE BRAZILIAN PUBLIC SECTOR AS% OF GDP
THE INDICATOR HAS INCREASED THE LAST YEARS AND WAS TAKEN IN JUNE
Source: CENTRAL BANK
After the economy grew from the recession with a growth of 1% in 2017, the Brazilian gross domestic product (GDP) grew by 0.4% in the first quarter of 2018, in the 5th consecutive peak in comparison with the previous three months. This was the last official result released by the Institute for Geography and Statistics (IBGE). Nevertheless, the economic recovery continues at a pace that is considered slow by economists.
REAL VARIATION OF GDP IN%
ECONOMY REPEATED TO GROW IN 2017, AFTER TWO YEARS OF TOMBO
Source: IBGE
Unemployment remains relatively high. It added 12.4% in the quarter ended June this year, equivalent to 13 million unemployed Brazilians. Although it fell from the historic record of 13.7% in the first quarter of 2017, it still remains well above the historic low of 6.2% recorded in the last three months of 2013. The historical series of Brazilian Institute for Geography and Statistics Statistics (BIM) starts in 2012.
See the history of the unemployment rate in Brazil in%
Source: IBGE
In the external accounts, the results were positive because of the balance of the Brazilian trade balance (exports minus imports). The current account, formed by the trade balance, by services and revenues, shows smaller deficits – which are fully financed by the inflow of foreign direct investment in recent years. In addition, Brazil has international reserves of US $ 380 billion – which help to prevent currency crises.
Look at the deficits on the foreign account and the inflow of foreign investments (in US $ billion)
Source: Central Bank
Basic interest of the economy
The country currently has the lowest interest rates in history. After 12 consecutive cuts, the Selic rate is currently 6.5% per year, the lowest level in the Central Bank series, which started in 1986. Although the Selic is at a historic low, the bank rate remains high.
Selic percentage
in% per year, given the Copom meeting dates
Source: BC
Official inflation, measured on the basis of the broad consumer price index (IPCA), closed 2017 at 2.95%, below the target set by the government of 3%. It was the first time this happened since the target system was implemented in 1999 in the country. In the 12 months to July (last issue) the percentage rose to 4.48%, mainly due to the impact of inflation in June. (who experienced the consequences of the truckers' strike). But analysts continue to estimate inflation in the target this year and then at 4.15% and 4.10%, respectively.
Cumulated inflation
in%
Source: IBGE and Central Bank / Note: the targets for 2003 and 2004 were changed during the year
The price of the American currency has risen in recent years and has recently risen to a level close to $ 4 with the election race, with the possibility of rising interest rates in the more mature economies, with trade tensions between the United States and China and the crisis in Turkey . The higher dollar promotes exports, making them more profitable (Brazilians get more from foreign sales), but at the same time they make it more difficult to travel abroad, which is more expensive. The valued US currency may also have an inflationary impact as imported products and inventories become more expensive.
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