Revising up our Brazil growth forecast

The latest data suggest that Brazil’s economy has been much more resilient to the latest virus waves than we had anticipated and, as a result, we’re revising up our GDP growth forecast for this year to 4.5% (previously 3.0%). The brighter economic outlook means that we now think that the Selic rate will be raised from 3.50% now to 5.50% by the end of the year (previously 4.75%). We remain of the view that Copom will bring the tightening cycle to an end sooner than most currently think.