Brazil: Current Data And Forecasts

The Brazilian economy continued strong in the first quarter of this year. Industrial production in March, published today, was up 2.75% from February and 18.56% from March 2009. Between February and March production of intermediate goods was up 1.25%, consumer goods, 2.26 and capital goods 2.47%. The year to year increases were, respectively, 17.64%, 13.32% and 35.80%. The levels of the production of intermediate, consumer and capital goods, are shown in the first chart.

In response to the strength of the economy and signs of rising price pressures, COPOM, the Monetary Policy Committee of the Bank of Brazil raised its target rate 75 basis points from 8.75% to 9.50% last week. The second chart shows the target rate since 2000. While not exactly low, by comparison with interest rates in the developed nations, the current level of interest rates in Brazil is a tribute to the long and relatively successful effort to control the country's bouts with hyperinflation.

In addition to the current data on the economy of Brazil in the data base EMERGELA, forecasts of selected features of the economy are available in the Haver data bases, FX4CASTS and OEFMAJOR. The former contains five year forecasts of exchange rates, interest rates, real growth rates, inflation rates and the current account as a percent of GDP. The latter contains ten year forecasts of many of the usual items found in the EMERGELA data base under the headings: Financial, National Income, Prices, Production, Unemployment, International Trade and Balance of Payments and Population/Demographics. The third chart shows the ten year annual forecast of industrial production from the OEFMAJOR data base and the actual 2OO9 industrial production from EMEREGLA.