Brazil’s economic activity in July 2022

Economic activity growth accelerated to 1.2% m/m in July (June: +0.9% mom). The July number was the best reading since February 2021. The result was a surprise to the markets, as they had expected a moderate expansion of 0.3%. This improvement came amid positive developments in the labor market and the measures taken by the government to support household consumption.

On an annual basis, economic activity rose 3.9% in July, better than June’s 3.0% expansion, the best result since August 2021. However, the trend continued to deteriorate, with average annual economic activity growth falling to 2.1% in July. (June: +2.2%), which marks its lowest level in more than a year.

Members of the LatinFocus Consensus forecast committee expect GDP to grow 1.9% in 2022, an increase of 0.4 percentage points from last month. For 2023, the committee sees GDP expanding by 0.8%.

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