1. Brazilian economy grew 2.45% in 2023, according to Central Bank preview

On Monday (19), the Brazilian Central Bank announced that the Economic Activity Index (IBC-Br), considered to be a “thermometer” of the Gross Domestic Product (GDP), registered a 2.45% increase in 2023. The Central Bank’s index registered a 0.82% increase for the month of December alone. The number was above market expectations of 0.75% growth.

The Brazilian Institute of Geography and Statistics (IBGE) will officially announce the GDP in March. The Brazilian economic team expects 3% growth and the financial market expects an increase of around 2.92%, influenced by the poor results in the last two quarters of the year.

Agência Brasil: Economia brasileira cresce 2,45% em 2023, aponta prévia do PIB
O Globo: Economia brasileira tem alta de 2,45% em 2023, aponta índice do Banco Central

2. BNDES launches credit line with reduced rates to fund exports

On Thursday, the Brazilian Development Bank (BNDES) launched a R$ 2 billion line of credit with a spread (the difference between the cost of funding and the amount charged for the loan) reduced by up to 60%. The amount will be used to fund the pre-boarding of exports.

The spread reduction is limited to BRL 150 million per transaction, and medium and small export enterprises will be the main beneficiaries of the new line of credit.

O Globo: BNDES lança linha de crédito de R$ 2 bilhões com taxas reduzidas para financiar exportações

3. Federal government plans to present tax reform bill to Congress by next month

According to Institutional Relations Minister Alexandre Padilha, the federal government plans to submit the tax reform bill to Congress by the end of March. Padilha also said the administration will first show the texts to leaders of the Chamber of Deputies and the Senate.

The administration plans to send three bills to Congress: one focused on the general tax reform, another on the managing committee for the new tax on goods and services (IBS), and a third one on the Selective Tax.

Valor: Proposta de regulamentação da reforma tributária deve ser apresentada até março, diz Padilha
Agência Brasil: Governo deve enviar PL que regulamenta reforma tributária até março

4. Tax collection increases 6.7% to R$ 280 billion in January, highest monthly amount in nearly 30 years

According to the Federal Revenue Secretariat, the federal government registered a record high in tax collection for the month of January. Tax collection and federal contributions rose 6.67% in real terms, reaching R$ 280.36 billion.

This is the highest value for any month in the Federal Revenue Service records, which start in 1995. In other words, it was the largest amount collected in almost 30 years, even adjusted for inflation. The result was above market projections captured in a Finance Ministry study in January. The government intends to use the high tax collection to try to eliminate the deficit in public accounts this year, a goal set out in this year’s Federal Budget Law (LDO).

Exame: Arrecadação federal chega a R$ 280 bilhões em janeiro, maior valor mensal em 24 anos

5. Interest rates in Brazil are almost stable, according to Central Bank president

Central Bank president Roberto Campos Neto said that interest rates in Brazil are “closer to being stable” than in other developing countries.

Campos Neto also highlighted that inflation in both Brazil and the rest of the world has maintained a downward trend, approaching the center of the target. However, services inflation has raised concerns. According to Campos Neto, “the necessary components” for understanding whether disinflation in the sector will remain steady or see a slowdown are missing.

CNN: Taxa de juros no Brasil está próxima do equilíbrio, diz Campos Neto
Exame: Juro real está mais perto da taxa neutra do que o de outros emergentes, diz Campos Neto