BMI View: We believe that Brazil's economic recovery will falter this year, and are revising down our 2014 real GDP growth forecast from 2.4% to 2.0%, below our 2013 estimate of 2.3% growth. Indeed, further monetary tightening, significant exchange rate weakness and ongoing project delays in the infrastructure sector will negatively impact both the private consumption and fixed investment components, weighing on headline growth.
Signs of weakening high frequency data in late 2013 and early 2014, the prospect of more significant monetary tightening this year, as well as ongoing project delays in the infrastructure sector, underpin our decision to downgrade our 2014 real GDP growth forecast for Brazil from 2.4% to 2.0%. Indeed, after ticking up throughout most of Q213 and Q313, the country's services and composite purchasing managers' indices began to head lower in Q413, which we expect to weigh on economic activity in the first several months of 2014. Similarly, we have seen consumer and business confidence data weaken as well, factors that are likely to weigh on industrial production and retail sales going forward.
That said, Brazil's shipping industry is poised to enjoy an impressive year. The country's largest port in Santos is forecast to see tonnage grow 9.00%, while container throughput will increase by just under 10.00%. The ports of Salvador and Itajaí are both set to record double-digit growth in the tonnage sphere in 2014.
Key Industry Forecasts
Total tonnage throughput at the Port of Santos to grow 9.00% in 2014 to reach 124.35mn tonnes.
Container throughput at Santos to grow 9.50% to reach 3.78mn twenty-foot equivalent units (TEUs) in 2014.
Total tonnage throughput at the Port of Itajaí to increase 13.00% in 2014 to reach 14.25mn tonnes.
Container throughput at the port of Itajaí to grow 9.00% to reach 1.20mn TEUs in 2014.
Key Industry Trends
Barge Development Will Eventually Ease Soy Trade
BMI believes the development of a barge...