Solid GDP in Brazil should not be repeated in the 2nd quarter, says UBS BB

The Swiss bank UBS BB stated this Tuesday (June 4, 2024) that it assesses the performance of GDP (Gross Domestic Product) as solid, in line with its expectations, but considers that “difficultly” will be repeated in the 2nd quarter and subsequent months.

The assessment was recorded in a report to clients and the market after the IBGE (Brazilian Institute of Geography and Statistics) announced that GDP grew 0.8% in the 1st quarter of 2024. Here is the full report (PDF – 1 MB).

According to economists Fabio Ramos, Alexandre de Azara and Rodrigo Martins, the pattern was similar to that recorded in the same period last year, with positive results in agriculture and livestock, although not of the same magnitude, but with a tendency towards partial recovery in next quarters.

However, marginally stronger consumption and investment should not be the trend in the 2nd quarter and 2nd half of the year given the uncertainty in the economy and the basic interest rate, the Selic, possibly tightened for longer.

For the 2nd quarter, UBS BB estimates growth of 0.4%, assessed as weak.

With information from Investing Brasil.