The decision by the Banco Central do Brasil (BCB) to hike the benchmark Selic rate by 50 basis points (bps) to 11.25% at its January meeting alters my 2011 interest rate forecasts but does not shift my outlook for monetary policy, namely that Brazil’s monetary authorities will continue to view rate hikes as something of… [Read more]
President-elect Dilma Rousseff has kicked off her cabinet appointments by announcing key figures in the economic team, reinforcing my view that the new administration will focus on continuing the economic policy mix started by the outgoing Lula government. Finance Minister Guido Mantega will remain in his post, while hawkish central bank president Henrique Meirelles is… [Read more]
My long-standing view that growth will cool considerably in Brazil in the latter part of 2010 is now firmly playing out, with latest industrial production data again surprising consensus expectations to the downside. June figures reveal a 1.0% month-on-month (m-o-m) contraction, the sharpest fall since the height of Brazil’s recession in December 2008. With the… [Read more]