Our Brazil GDP nowcast is less bullish than before

Brazil probably had a weaker first quarter than CEIC's proprietary GDP nowcast had previously anticipated. Nonetheless, it is still estimated to have grown at a faster rate than the previous quarter.

Our daily nowcast suggests that the Brazilian economy expanded at a 2.3% year-on-year pace in the three months through March, up from the 2.1% pace in 4Q 2023.

If you are a CEIC user, access the story here.

The daily frequency of the GDP nowcast is especially useful given that Brazil publishes its official GDP data with a significant time lag – usually two months after the reference quarter. The data for Q1 will be released on June 4th.

Since early April, CEIC's nowcast has incorporated several pessimistic releases.

The central bank's economic activity index – known as IBC-BR – is especially notable. This indicator posted an abrupt 2.2% year-on-year drop for March, according to a report released on May 15th. CEIC's nowcast began to reflect this deterioration significantly earlier; from early April, it was accounting for weak official data on retail sales and vehicle production.

The IBC-BR had the largest negative impact on the Q1 nowcast, cutting 0.2 percentage points off our estimate.

CEIC's daily GDP Nowcasts deploy a dynamic factor model. This statistical tool is used to simplify complex data by identifying and capturing underlying patterns, or "factors," that drive changes across multiple variables over time. Such analysis avoids having to consider each variable separately.

If you are a CEIC user, access the story here.