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World Economy

18

OPEC Monthly Oil Market Report – August 2017

Non-OECD

BRICs

Table 3 - 2: Summary of macroeconomic performance of BRIC countries, 2017-2018*

Brazil

In June, Brazil’s trade surplus

widened to total $7.2 billion, compared to $3.9 billion a year earlier.

Exports

increased by 23.9% y-o-y, supported by semi-manufactured products together with a rise in exports of crude

oil and manufactured products. The trade surplus increased by more than 53% in 1H17, reaching

$107.7 billion, due to record harvests of soy and higher prices of a number of main exports like iron ore, soy

and oil. Exports to China, Brazil’s top trading partner, increased by around 24% y-o-y.

Imports

, on the other

hand, grew at a lower rate of 3.3% y-o-y to $12.6 billion.

Graph 3 - 8: Brazilian inflation vs. Interest rate

Graph 3 - 9: Brazilian unemployment rate

Inflation

continued its easing trend, reaching 2.6% y-o-y in June, which was its lowest rate since January

1999. This represented a quick fall in inflation from May’s 3.4%. The current path of rapidly declining inflation

could pose a risk of deflation if household spending and investment are not encouraged. Therefore, to catch

up with the rapidly declining inflation, for the second month in a row, the central bank lowered its benchmark

interest rate

by a full 10 percentage points in July to stand at 9.25%. The

unemployment rate

posted its

third back-to-back fall in June, registering at 13.0% compared to 13.3% in May.

In July 2017, business conditions in the

manufacturing sector

continued to improve, though at the slowest

pace in four months. The IHS Markit Brazil Manufacturing PMI stood at 50.0 in July, compared to June’s

50.5. The index survey showed a slower increase in production and new orders together with lower job

creation and buying levels.

2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Brazil

0.5

1.5

3.9

4.2 -20.0 -36.5

-7.8

-6.1 77.4 82.0

Russia

1.2

1.4

4.1

4.1 50.0 41.5

-2.2

-1.4 11.9 12.8

India

7.0

7.5

3.7

4.7 -22.0 -29.3

-3.2

-3.1 49.8 48.7

China

6.7

6.3

1.8

1.8 146.1 180.1

-4.1

-4.4 18.7 22.2

Sources: Consensus Economics, Economic Intelligence Unit, Financial Times, OPEC Secretariat and Oxford.

Note: * 2017 and 2018 = Forecast.

GDP growth rate

Consumer price

index,

% change y-o-y

Current account

balance, US$ bn

Government

fiscal balance,

% of GDP

Net public debt,

% of GDP

2.6

9.25

0

5

10

15

0

2

4

6

8

10

12

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

National consumer price index (LHS)

Selic rate (RHS)

Sources: Banco Central do Brasil, Instituto Brasileiro de

Geografia e Estatística and Haver Analytics.

% change y-o-y

% per annum

13.0

11.0

11.5

12.0

12.5

13.0

13.5

14.0

Jun 16

Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

%

Sources: Instituto Brasileiro de Geografia e Estatística and

Trading Economics.