Macroeconomic outlook report: Brazil

During the fourth quarter of 2021, the year-on-year growth rate of Brazil’s GDP stood at 1.56%, keeping on track with the economic recovery that began in the third quarter of 2020, although at a lower growth pace. The year-on-year growth rate of industrial production index decreased significantly compared to the previous quarter to a growth rate of -5.49%. As for the labor market, the unemployment rate in the fourth quarter of 2021 was 11.60%, registering a decrease compared to the third quarter of 2021. The Brazilian real depreciated against the dollar, setting the exchange rate at 5.58 R$/USD. Finally, inflation stood at 10.49%, after an increase compared to the previous quarter.

Macroeconomic outlook report: Brazil 4Q21

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Macroeconomic overview

• The year-on-year growth rate of Brazilian GDP stood at 1.56% after an shrinkage of 2.52 p.p. compared to the previous quarter. This deceleration in GDP was mainly due to the lower comparative benchmark of 2020 alongside new COVID variants denting private consumption boost.
• Industrial production decreased its year-on-year growth rate by 3,94 p.p. compared to the previous quarter, registering a growth of -5.49%.
• As for the labour market, the unemployment rate decreased by 1.53 p.p. compared to the previous quarter, standing at 11.60% in 4Q21.
• The exchange rate increased by 0.18 reals per dollar compared to the previous quarter, registering an average exchange rate of 5.58 R$/USD in 4Q21.
• The Brazilian inflation rate increased in 4Q21 by 0.85 p.p. compared to 3Q21, standing at 10.49%, far from the BCB's target range for 2021 of 3.75%.

For more information access the executive document in pdf (available in Spanish and Portuguese).