We estimate flat growth for Brazil in the second quarter

The increase is a consequence of stronger data in June.

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Brazil

Macro Vision: we raised our 2Q17 GDP forecast to 0.0% qoq/sa from -0.2%.The increase is a consequence of stronger data in June. Positive surprises include industrial production, retail sales, service real revenues and the labor market. In our assessment, 2Q17 was marked by stronger underlying growth than we had forecast for the GDP headline. Simulations suggest that the result will be revised upwards at the time of next quarter’s GDP release. ** Full story here.

According to the IBGE’s monthly services survey (PMS), services sector real revenue rose 1.3% mom/sa in June, following a 0.5% gain in May. The year-over-year growth came at -3.0%, above consensus (-3.9%) and our forecast (-3.5%). The positive headline is consistent with industrial production and other monthly indicators advancing in June as the economic recovery continues to become more widespread. 9 out of 12 activities showed positive growth, so the diffusion of activities came in line with the strong headline.

The TLP (new Long Term Interest Rate) report was read in the joint commission (Lower House and Senate) formedto discuss this topic. According to Broadcast, the Committee Chair, Senator Lindbergh Farias, announced voting in the commission would take place on August 22.

Fuente: ITAU

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