Itau Unibanco had previously estimated that Brazil’s first quarter GDP would grow 0.6% qoq, but according to IBGE growth was more modest at only 0.2%. The bank has also predicted that this year the Brazilian economy was going to grow 3.1%, one of the most optimistic forecasts in the market. However, given the weak economic and industrial activities in the first quarter, the bank revised down its growth projections to 2% in 2012. If they are right, that’s below last year’s 2.7%. The bank’s estimates are also below the market’s average (according to Focus Bulletin) of 2.72% for 2012.¬†Here is from their latest macro note:

“Brazil’s¬†GDP grew less than we expected in the first quarter: 0.2% qoq/sa. Consumption rose, while investments decreased for the third quarter in a row. Demand is expanding at a stronger pace than total GDP, which indicates that production will catch up ahead. But activity data already available for Q2 unveils that this pickup is coming slower than we had anticipated.”

The government started 2012 touting a 4.5% GDP growth though it has lowered its projections to 3% (which is starting to look unrealistic as well).

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