Economic recovery

Inflation, dollar, Brazil risk, interest, stock market, trade, all these factors show that the economy is increasingly sustainable

Brazil closed 2016 with a better scenario. Indicators suggest that important steps have been taken to build the necessary conditions for the country to grow again. Inflation, dollar, Brazil risk, interest, stock market, trade, all these factors show that the economy is increasingly healthy and sustainable.

Part of this improvement movement can be seen in the Central Bank's Economic Activity Index, which attempts to project the growth of the country before the official announcement of the result. Between October and November, there was an advance of 0.20%.

This indicator also shows a slight improvement, of 0.02%, in the quarter ended in November. This increase is recorded in the comparison with the immediately previous quarter, which ended in October.

Even with the recession that affected Brazil last year, some sectors of the economy showed resistance. The electricity sector, within GDP, increased 4.5% in 12 months through November. On the same basis of comparison, the real estate segment grew 0.2% and exports 4.5%.

The return of growth

For 2017 and for the following years, the expectation of analysts of the financial market is of continuous growth. The projection is that the year ends with an expansion of 0.50% in the Gross Domestic Product (GDP); For 2018, the increase will be higher, of 2.30%. In 2019 and 2020, the expectation is an increase of 2.50%.

This scenario of positive numbers has become increasingly real, especially given the perspective of controlled inflation. The Broad Consumer Price Index (IPCA) for 2016, which stood at 6.29%, is part of the conditions necessary for sustainable growth.

The rate was within tolerance ranges and will allow a better planning horizon for consumers and investors. For the Central Bank, in 2017 the IPCA should decelerate further, to 4%; In 2018, the index should go to 3.4%.

All these indicators, combined, suggest that Brazil has migrated from an imbalanced economy to a more sustainable model, with low inflation and growth in the Gross Domestic Product (GDP).