Brazil

Brazil posted a current account deficit of $2.764 billion in March, the lowest shortfall for the period in five years, amid a solid performance in foreign trade, central bank data showed on Monday, Reuters reported. This was the best reading for March since 2017, when the country recorded a current account surplus of $185.5 million. The performance was backed by an improvement in the trade balance, which showed a surplus of $6.109 billion against a $514 million deficit in March 2021.

Brazil's economic activity fell for the second month in a row in May, a central bank index showed on Thursday, Reuters reported. The IBC-Br economic activity index, a leading indicator of gross domestic product, fell a seasonally adjusted 0.11% in May from the previous month. The April drop was revised to 0.64% from the previously reported 0.44%. Services activity rose much more than expected in May, while retail sales and industrial output growth came below market estimates.

Retail sales in Brazil grew more slowly than expected in May, with momentum decreasing amid persistent inflation, Reuters reported. The seasonally adjusted monthly increase of 0.1% in May from April was much less than the median forecast of 1.0% growth in a Reuters poll of economists. Government statistics agency IBGE said month-on-month sales were up in six of the eight categories surveyed in May, with the biggest impact coming from the 3.5% rise seen in pharmaceutical and medical goods. Sales fell 0.2% compared with May last year, IBGE said, versus a 2.6% increase forecast by economists.

Brazil's trade surplus reached $8.814 in June, official figures showed on Friday, below market expectations, Reuters reported. The reading was the second best for the month of June, after last year, since the figures were recorded in 1989. According to the Economy Ministry, exports grew 15.6% from June last year, to $32.7 billion, while imports jumped 33.7% to $23.9 billion. Global inflationary pressures have been boosting the value of tradable goods, amid rising food and energy prices and disrupted supply chains with the Russia-Ukraine war.

Brazil's federal government posted a bigger-than-expected primary budget deficit in May as net revenue fell during the period, official figures showed on Wednesday, Reuters reported. According to the Treasury, the budget deficit reached 39.4 billion reais ($7.55 billion) last month, worse than the median forecast of a 30.3 billion reais deficit in a Reuters poll. Net revenue fell 3.3% in real terms over May of last year, as transfers to states and municipalities surged 35.4% on the same basis.

Brazil created a net 277,018 formal jobs in May, Labor Ministry figures showed on Tuesday, above market expectations, but workers' pay has declined, Reuters reported. According to the ministry, the average monthly salary of new jobs created in May decreased 0.94% from April to 1,898 reais ($363.59), after having posted a gain in the previous month. Job openings happened across the board, led by the service sector, which alone created 120,294 new jobs, recovering from the blow suffered from the coronavirus pandemic.

Brazil's central bank is aiming for inflation in 2023 "around" the 3.25% target but less than 4%, its chief, Roberto Campos Neto, said on Thursday, as policymakers hike interest rates to cool surging consumer prices in Latin America's largest economy, Reuters reported. When it raised its key interest rate to 13.25% last week and penciled in another hike for August, the central bank said it was looking to ensure inflation next year converged "around the target" rather than "to its target." "Around is less than 4%, just to make that very clear," Campos Neto said in an online news conference.

Brazil's antitrust watchdog on Wednesday approved the sale of state-run oil firm Petrobras' 51% stake in gas company Gaspetro with no restrictions, Reuters reported. Petrobras is selling the stake to Compass, which is controlled by energy company Cosan, for 2.03 billion reais ($394.15 million), according to a statement from Compass when the deal was announced last July. Japan's Mitsui & Co. owns the remaining 49% stake in Gaspetro, a holding company which controls 18 distributors of piped natural gas. The watchdog's Wednesday decision came on a 4-3 vote.

Brazil’s central bank said an extension of its aggressive tightening cycle with another interest rate hike in August is needed to assure that high inflation forecasts will fall back around their target, Bloomberg News reported. Policy makers discussed signaling a steady interest rate for a “sufficiently long” period but concluded another hike would still be needed, according to the minutes of their June 14-15 meeting, when the board raised borrowing costs to 13.25%.