As the Institute of Statistics announced today, real gross domestic product in the fourth quarter of 2009 rose by 2% on the previous quarter in seasonally adjusted terms. Investment and private consumption were once again the main drivers, although the latter lost some of the momentum seen in the two preceding quarters. Exports picked up, rising by 3.6% real. However, they were unable to match the steep rise in imports which notched up an increase of more than 9% on the back of vigorous domestic demand.
Brazil: Buoyant growth – rate hike imminent
Not least thanks to the stability-oriented economic policy of recent years, the impact of the global financial and economic crisis on the Brazilian economy has been very mild compared with other major emerging markets. This is evidenced not only by the fact that real gross domestic product over 2009 as a whole was practically unchanged on a year earlier (dropping a mere 0.2%), but also by the fact that, despite the global crisis, Brazil was able to record net foreign direct investment inflows to the tune of USD 36bn in 2009, the highest figure for more than 15 years.
With the positive economic outlook and inflation expectations having risen of late, we expect the Brazilian central bank to start gradually nudging up its key rate in April at the latest. Since July 2009 it has stood at 8.75%. In response to the crisis the central bank had lowered the key rate in several steps by a total of 500 basis points since January 2009. At the end of 2010 we see the key rate at around 10.5%.
Gregor Eder
tel.: 49 / 69 / 2 63 – 5 33 58
e-mail: [email protected]