March 15th, 2024


1. Return to school leads to inflation increase in February

According to data from the Brazilian Institute of Geography and Statistics (IBGE), the Extended National Consumer Price Index (IPCA) registered a 0.83% increase in February. The growth was heavily influenced by students returning to school. In February, private schools and courses made fee adjustments. The increase this year was 4.98%, which influenced inflation.

The index shows there was a bigger increase compared to January, when prices were 0.42% higher. In the same period of the previous year, the increase was 0.84%, meaning the cumulative inflation rate for the past 12 months is 4.5%. The results have also exceeded market expectations, which predicted a 0.78% increase in prices in January and a cumulative inflation rate of 4.42%.

G1: IPCA: preços sobem 0,83% em fevereiro, com reajuste anual da educação
O Globo: Apesar de mais alta, inflação de fevereiro traz boas notícias, na avaliação de analistas

2. Economists predict GDP growth and higher inflation in 2024

According to Boletim Focus, which was published by the Brazilian Central Bank on Tuesday (12), economists in the financial market increased their estimate for Gross Domestic Product (GDP) growth, as well as the inflation rate, for 2024. The survey, which interviewed over 100 financial institutions, reveals that Brazil’s GDP is expected to grow 1.78% in 2024. The previous estimate was 1.77%.

Furthermore, following a series of weeks in which inflation eased, analysts increased their predictions slightly to 3.77%, compared to the previous 3.76%. This estimate is still lower than the inflation goal set by the National Monetary Council. The inflation goal for this year is 3% and it is considered within the goal if it varies between 1.5% and 4.5%.

G1: Boletim Focus: mercado eleva estimativa de alta do PIB em 2024 e vê inflação maior

3. Brazil registers improvement in HDI, but still drops in the UN Human Development Ranking

Brazil interrupted a two-year sequence of declines in the Human Development Index (HDI), registering an improvement: the indicator reached 0.760, an increase in relation to the previous report (when it reached 0.754). The HDI ranges from zero to 1 and the higher the better.

The improvement was mostly driven by the increase in average life expectancy, now standing at 73.4 years. However, Brasil is still below pre-pandemic levels (when the index was 0.766 and life expectancy was 75.3 years) thanks to the challenges faced during this time. Political polarization also makes it more difficult to improve quality of life.

Despite the improvement, Brazil fell two positions in the global HDI ranking, remaining below other Latin American countries including Argentina, Peru, Uruguay, and Chile. The income per capita also registered a slight increase, going from US$14,370 per annum in 2021 to US$14,615 in 2022. However, the country was not able to recover its social welfare levels from before the pandemic, while other countries are showing signs of recovering to rates they had before the health crisis.

Valor: IDH do Brasil volta a subir após 2 anos de queda, mas polarização política atrapalha
O Globo: Brasil melhora IDH, mas cai duas posições no ranking de Desenvolvimento Humano da ONU em 2022

4. Chamber of Deputies approves bill for “Fuels of the Future”

On Wednesday, the Chamber of Deputies approved a bill aimed at “fuels of the future,” covering initiatives such as national programs for green diesel, sustainable aviation fuel, and biomethane.

Among the measures approved are increases in the ratio of ethanol to gasoline and of biodiesel to diesel, potentially reaching 35% and 20% respectively by 2030. The bill also determines rules for the development of Sustainable Aviation Fuel (SAF) and establishes the ANP as a regulatory agency for synthetic fuels and carbon gas storage, authorizing Petrobras to work in these areas.

The bill will now be submitted to the Senate.

Câmara dos Deputados: Câmara aprova projeto dos “combustíveis do futuro”
Valor: Câmara aprova projeto do ‘combustível do futuro’

5. Credit card consumption reaches 57% of Brazilian families; default rate drop to 5.5%

According to the Brazilian Association of Credit Card and Services Companies (ABECS), the use of credit cards continues to grow among Brazilian families, reaching 56.8% of consumption. Default rates registered a drop to 5.5% in 2024. According to the association, the government program Desenrola and the stability of inflation and interest rates have contributed to this drop.

For 2024, ABECS expects an even greater drop in default rates by the end of the year, contributing to an estimated 10% to 12% increase in the number of credit card transactions. The growth does not happen due to a larger number of credit cards being issued, but by increases in consumption and credit card limits. The association also expects growth of between 8.5% and 10.5% in electronic payment methods – such as credit, debit, and pre-paid cards – reaching somewhere between R$ 4.05 trillion and R$ 4.12 trillion in transactions this year.

Folha: Consumo das famílias via cartões cresce para 57%; inadimplência cai a 5,5%