Brazilian economy to recover by end of 2016

Brazilian economy again posted negative growth rate in Q3. The GDP data for Q3 shows the economic activity declined by -1.7% q/q in compare to -2.1% q/q in Q2. 

The major factors to lead the negative growth are investments and private consumption. The two indicators are expected to remain low in the coming quarter due to higher interest rate. On the other hand, weaker BRL support the net exports to perform well.

"Economic activity is likely to start recover on only a slow pace towards end 2016, and to pick up somewhat in 2017 as a stabilization of commodity prices and monetary policy easing will help", foresees Nordea Bank.