Brazilian economy likely grew 0.5 pct year-on-year in Q2, says Wells Fargo

The Brazilian economy recorded a deep recession in 2015 and 2016. The real GDP nosedived 8 percent during that period. But the recession came to an abrupt end in the first quarter of 2017 with real GDP expanding over 4 percent at an annualized rate. Even if the year-on-year rate of growth stayed in the negative territory in the first quarter, it is expected to return to positive territory. According to a Wells Fargo research report, the Brazilian economy is expected to have grown 0.5 percent year-on-year in the second quarter.

The economic growth release should be the data highlight of the week in Brazil; however, one of the many CPI inflation indices would also be released next week. Inflation in Brazil has decelerated sharply in 2017 due to the generally depressed nature of the Brazilian economy and stabilization in the value of the currency. This marked drop in inflation has provided the Central Bank of Brazil scope to cut its main policy rate this year. Many analysts expect the monetary easing in the quarters ahead, added Wells Fargo.

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