Brazil & Southern Cone - May 2014 (ISSN 1741-4431)

Growth: Real GDP growth was 2.6% year-on-year in the first quarter of 2014 according to latest data from the central bank – the slowest quarterly expansion since 2010. In the run up to the latest results, national dailies like La Tercera reported that the central bank would cut its GDP growth forecast for 2014 to 3.2%, down from 3.4% in April. In early, the bank lowered its GDP forecast for 2014 to between 3%-4%, down from the 3.75%-4.75% projected in December 2013. The monthly Imacec index of economic activity, which acts as a proxy for GDP, rose 3% year-on-year in April, up from 2.8% in March.

Inflation: The national statistics institute (INE) reported that monthly reported inflation in April was 0.6% - significantly higher than the 0.2% expected by private sector economists. This brings the accumulated rate for the year to 2.1%. The year-on-year rate was 3.3%. The April figure prompted analysts to revise up their full year forecasts to 3.7%, up from a previous 3.3%. Inflation ended 2013 at 3.3%.