Nowcasting Brazil: GDP is poised for further acceleration

Our latest nowcast says Brazil's robust economy is not slowing down. (The central bank probably agrees; it just doubled the pace of monetary tightening.)

Gross domestic product probably grew at 3.8% year-on-year pace in the third quarter, according to CEIC's proprietary nowcast. This would mark the fourth consecutive quarter of economic acceleration, if confirmed with the official release on Dec. 3. Household consumption is expected to be the primary driver; that's been supported by a tight labor market. Unemployment recently dropped to a 10-year low.

These conditions are prompting economists to expect more robust growth for 2024 as a whole; meanwhile, the Banco Central do Brazil unanimously voted to lift the key rate by half a percentage point on Nov. 6.

CEIC's machine learning-based nowcast integrates both traditional and alternative data streams to provide estimates well ahead of official data releases. The most important variable contributing to our Brazilian Q3 nowcast was the flow of heavy vehicles on highways; this added 0.35 percentage points to the estimate. Utilization of industrial capacity was also a positive contributor; the GDP projection was held back, however, by indicators of business confidence and retail trade.

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