Taking the Pulse of Brazil’s Economy

Emerging markets are performing better this year than developed markets.Investors’ appetite for risk has increased and many of the emerging market indices have rebounded nicely this year. One of main developing countries that is attracting investor attention this this year is Brazil. The iShares MSCI Brazil Index Fund (EWZ) ETF is up by 10.45% as of the end of first quarter.

In order to take the pulse of the economy of Brazil, I was researching the site of the Banco Central Do Brasil, the central bank of Brazil. The following are excerpts from a presentation made by the chief of the bank Henrique de Campos Meirelles in New York last month. The title of his presentation was “Brazil: How the Country is Overcoming the Current Turmoil”.

  • At the start of the current economic crisis, Brazil had low leveraged banking system
  • The international reserves stood at US$ 205 B
  • The country enjoyed a robust domestic demand-led growth
  • Average household credit grew by 32% since January,2004
  • The risk-based capital adequacy of banks are well above the regulatory minimum of 11%


  • Non-Performing Assets (NPAs) stood at 6.4% of total loans at end of last year


  • In January of this year seasonally adjusted retail sales increased by 4.4% over December


  • Auto Sales numbers has picked up since the beginning of the year


To download the full presentation, click here.

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