May 3rd, 2024


1. OECD estimates Brazilian GDP will grow 1.9% in 2024

The Organization for Economic Co-operation and Development (OECD) increased its projection for Brazilian GDP growth in 2024. According to the organization, the Brazilian economy will grow by 1.9% in 2024 and 2.1% in 2025.

The new forecast is higher than the OECD’s previous expectation of 1.8% growth in 2024.

According to the document, one reason for this boost is that domestic demand and family consumption will be key to economic growth. The assessment considers the evolution of salaries and a more stable period of job creation.

UOL: OCDE eleva para 1,9% previsão de crescimento da economia brasileira em 2024
OCDE: OECD Economic Outlook, Volume 2024 Issue 1

2. Administration fears uncertainty abroad could slow interest rate cuts

The federal government is concerned about the impact the economic situation abroad could have on the Brazilian economy.

Internally, the economic team fears the worsening of economies abroad might impact the trend of reductions in the basic interest rate, Selic. Brazil’s growth is linked to the increase in domestic demand, so a Central Bank decision not to reduce the Selic rate could affect consumption.

This week, Finance Minister Fernando Haddad said the current worsening of the Brazilian economy is related to the situation in the US economy. According to him, this is what makes the situation “more worrisome,” as macroeconomic indexes have been improving.

UOL: Haddad diz que situação da economia americana é o que torna cenário mais preocupante

3. Unemployment rate grows to 7.9%

The unemployment rate in the first quarter of the year was 7.9%, a 0.5 percentage point increase compared to the last quarter of 2023. This data is according to the Continuous National Household Sample Survey (PNAD), which was published by the Brazilian Institute of Geography and Statistics (IBGE) on Tuesday.

According to IBGE, the reason for the increase is that more people began to look for a job in Brazil, which means they are out of a job. The number of people looking for a position grew 6.7% compared to the last quarter of 2023, representing 542,000 people currently seeking work.

IBGE says that, despite the increase, the number of people out of work is 8.6% below what was registered in the first quarter of 2023.

IBGE: Taxa de desocupação sobe para 7,9% e população ocupada tem redução de 0,8%

4. Bill on fiscal incentives for the events sector approved

The Brazilian Senate approved the bill determining a R$ 15 billion ceiling for fiscal incentives from the Emergency Program for the Resumption of the Events Sector (PERSE), created to help the sector during the COVID-19 pandemic. The bill also determines a reduction in the types of services that are benefited from 44 to 30.

Congress and the federal government have been discussing PERSE over the past few months. The economic team aimed to reduce the reach of the program to increase tax collection. However, members of Congress argued for the continuity of incentives as they were originally created. 

The bill will now be submitted for sanctioning by the President.

Senado Federal: Perse: projeto que reformula incentivos ao setor de eventos segue para a sanção

5. Moody’s maintains Brazil’s credit score but changes outlook to ‘positive’

International risk assessment agency Moody’s announced it has maintained Brazil’s credit score at Ba2 but changed the assessment outlook from “stable” to “positive.”

The statement says that “stronger growth” and “fiscal consolidation” could counterbalance debts in public accounts, but adds that “there are risks” that could prevent this improvement from continuing.

President Lula and Finance Minister Fernando Haddad celebrated the agency’s rating.

G1: Moody’s mantém nota de crédito do Brasil, mas muda perspectiva para ‘positiva’