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The Central Bank’s Economic Activity Index (IBC-Br) rose by 0.69 percent in June compared to one month prior. The measurement, considered to be a reliable predictor of Brazil’s GDP, came way better than banks expected.
The results took the Q2 growth rate to a positive 0.57 percent. Brazil’s official Q2 GDP reading will come in September.
Markets have grown increasingly bullish on GDP growth for the year. According to the Focus Report, a weekly survey with top-rated investment firms by the Central Bank, the median GDP growth forecast has risen for the past seven weeks, now at 2 percent for 2022.
Analysts have moved the needle following multiple moves by the government to tame fuel inflation. For seven weeks now, the median year-end inflation prediction has been lowered — currently at 7.02 percent.
However, for 19 weeks in a row, expectations for inflation in 2023 have gone up (to 5.38 percent), as current measures create long-term fiscal risks.
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