2025-03-07 13:37

BRASILIA, March 7 (Reuters) - Brazil's economy grew 3.4% in 2024, the strongest since the post-pandemic rebound, but momentum slowed more than expected in the fourth quarter as restrictive monetary policy weighed on activity, fueling bets of an earlier end to the rate hike cycle. The annual growth of Latin America's largest economy, reported on Friday by statistics agency IBGE, once again defied market expectations for a more modest increase, supported by strong gains in investment and household consumption amid government policies aimed at boosting disposable income. The performance in President Luiz Inacio Lula da Silva's second year in office marked an acceleration from the 3.2% expansion recorded in 2023, and was the best since the 4.8% growth seen in 2021. However, the economy showed signs of cooling in the final three months of the year as it expanded just 0.2% from the third quarter, missing the 0.5% median forecast in a Reuters poll of economists. This followed downwardly revised 0.7% growth in the third quarter over the previous three-month period. Jason Tuvey, deputy chief emerging markets economist at Capital Economics, said the data confirms that Brazil's "recent period of strong growth has come to an abrupt end." He now projects 1.8% economic growth for 2025, down from a previous forecast for 2.3%, which he expects will prompt the central bank to wrap up its tightening cycle this month with the 100 basis-point hike policymakers have already penciled in. Before the GDP release, private economists surveyed weekly by the central bank had expected rates to peak in June. They had also projected GDP growth would decelerate to 2% this year, while the government maintained on Friday its 2.3% forecast, as activity loses steam amid aggressive monetary tightening to curb inflation, which ended last year at 4.8%, above the official 3% target. Since September, central bank policymakers have raised interest rates by 275 basis points to 13.25%, signaling an additional 100 basis-point hike later this month, on the view that a robust labor market, expansionary fiscal policy, and vigorous credit expansion have been supporting consumption and aggregate demand. "We observed how monetary policy translated into lower consumption in the last quarter, reinforcing the conviction that the central bank doesn't need to raise interest rates beyond the 15% already priced in," said Jose Alfaix, economist at investment management firm Rio Bravo, referring to the rate peak currently embedded in the yield curve . PERFORMANCE BY SECTOR On the supply side, Brazil's dominant services sector grew just 0.1% in the fourth quarter from the previous three months, sharply slowing from the 0.7% pace recorded in the third quarter. Industry expanded 0.3% in the same period, while agriculture contracted by 2.3%. Looking at demand, household consumption - the main driver of GDP growth throughout the year - fell 1% from the third quarter, said IBGE. "We saw a slight pickup in inflation, particularly food prices. The labor market continued to improve, but at a slower pace. Meanwhile, interest rate hikes that began in September last year were already weighing on activity," said Rebeca Palis, IBGE's national accounts coordinator. On an annual basis, the 3.6% growth recorded in the fourth quarter also fell short of the 4.1% expected. Sign up here. https://www.reuters.com/markets/brazils-economy-grows-34-2024-02-q4-2025-03-07/

2025-03-07 13:33

OTTAWA, March 7 (Reuters) - Canada's economy gained a net 1,100 jobs in February, entirely in part-time work, and the jobless rate held at 6.6%, Statistics Canada data showed on Friday. Employment in the goods producing sector fell by a net 19,500 jobs, largely in utilities. The services sector was up by a net 20,600 positions, led by wholesale and retail trade, as well as finance, insurance, real estate, rental and leasing. Feb 2025 Jan 2025 Jobs gain/loss +1,100 +76,000 full-time -19,700 +35,200 part-time +20,800 +40,900 Unemployment rate 6.6% 6.6% Participation 65.3% 65.5% Labor force 22.467 mln 22.484 mln Feb 2025 Feb 2024 % change Avg hourly wage C$36.94 C$35.53 +4.0 NOTE: Analysts surveyed by Reuters had forecast an increase of 20,000 jobs in February, and for the unemployment rate to rise to 6.7%. Hourly wage figures are for permanent employees. Keywords: CANADA ECONOMY/EMPLOYMENT Sign up here. https://www.reuters.com/markets/canada-gains-net-1100-jobs-february-jobless-rate-holds-66-2025-03-07/

2025-03-07 13:14

WASHINGTON, March 7 (Reuters) - Plans will be discussed about how to acquire cryptocurrency for a U.S. strategic reserve that will include bitcoin, Treasury Secretary Scott Bessent told CNBC on Friday before industry leaders meet with President Donald Trump at the White House. Bessent, in an interview, said seized crypto assets would go into the reserve first "then we'll see what the way forward is for more acquisitions for the reserve. And we're starting with Bitcoin, but it's an overall crypto reserve." Sign up here. https://www.reuters.com/technology/us-treasury-chief-says-plan-be-put-place-acquiring-crypto-2025-03-07/

2025-03-07 13:12

STOCKHOLM, March 7 (Reuters) - There are upside and downside risks for inflation in Sweden and the central bank has to be watchful and ready to act if needed, Riksbank First Deputy Governor Anna Breman said on Friday after data this week showing an uptick in price pressures. "We need to be prepared to act and at the same time we need to remain calm and really look at the data that comes in ... on where inflation and the economy are heading," she said. Headline inflation picked up pace in February, flash figures from the Statistics Office showed on Thursday, the second month in a row in which inflation has surprised on the upside. Breman said that January inflation had been impacted by regular changes to the basket of goods sampled by the statistics office, while flash data for February contained no details on what was behind the unexpected pick up in price pressures. "What wasn't good, though, was that CPIF ex energy also rose more than expected (in February)," she said. CPIF ex energy is a measure of headline inflation excluding volatile energy prices. Nevertheless, Breman said there were still good prospects for inflation to stabilise around the central bank's 2% target, including the recent strengthening of the Swedish crown. "We have stable inflation expectations, we have moderate wage rises in Sweden, we have inflation that has ... clearly fallen back close to 2%, so the conditions for low and stable inflation are good, even in an uncertain world." The Riksbank announces its next policy decision on March 20. Analysts expect no change in rates. Sign up here. https://www.reuters.com/markets/europe/both-upside-downside-risks-swedish-inflation-riksbanks-breman-says-2025-03-07/

2025-03-07 12:35

March 7 (Reuters) - Slovak Prime Minister Robert Fico said on Friday the possibility of shipping Azerbaijani gas was part of discussions with the European Commission on restarting transit flows through Ukraine. Fico got the issue of Ukraine's halt to gas transit mentioned in the conclusions of a summit of European Union leaders on Thursday, after threatening to block any final declaration without it. Slovakia stopped receiving Russian gas supplies via Ukraine at the end of last year after Kyiv declined to renew an agreement with Moscow, trying to deprive Russia of revenue to fund its invasion. The move angered Fico and Slovakia as it hit the country's own transit operations and forced it to find different routes for supplies. Fico, seeking a resumption of flows, says the halt has hit prices and hurt the EU's competitiveness. On Friday, Fico said the possibility of transiting Azerbaijani gas through Ukraine using swap operations was part of discussions. The economy minister would discuss it in Brussels on Friday, he said. In Thursday's summit conclusions, EU leaders called on the Commission, Slovakia and Ukraine to "intensify efforts towards finding workable solutions to the gas transit issue, while taking into consideration the concerns raised by Slovakia." The EU has sought to cut its remaining reliance on energy from Russia since Russia's invasion of Ukraine in 2022. Slovakia said in January it saw the option of shipping gas from Azerbaijan via Ukraine as being back on the table. Last year, Slovakia's main gas buyer SPP signed a short-term pilot contract to buy natural gas from Azerbaijan. Since the Ukraine transit halt, Slovakia has relied on supplies from Hungary, which mostly takes Russian gas through TurkStream and the Balkans. Sign up here. https://www.reuters.com/business/energy/gas-azerbaijan-part-ukraine-transit-talks-slovakias-fico-says-2025-03-07/

2025-03-07 12:25

ROME, March 7 (Reuters) - Global food commodity prices rose in February, driven by higher sugar, dairy, and vegetable oil prices, the Food and Agriculture Organization (FAO) of the United Nations said on Friday. The FAO Food Price Index, which tracks monthly changes in international prices of globally traded food commodities, averaged 127.1 points last month, up 1.6% from January and 8.2% from February 2024. The jump was largely driven by sugar prices, which shot up 6.6% month-on-month, pushed higher by concerns over tighter global supplies for the 2024/25 season, partly because of unfavourable weather conditions in Brazil. Dairy prices increased 4% from January, with all major dairy products rising, spurred on by strong import demand which exceeded production in key exporting regions. Vegetable oil prices rose 2% month-on-month and 29.1% year-on-year, largely due to higher prices for palm, soy, and sunflower oils, driven by supply constraints in Southeast Asia and strong demand from the biodiesel sector. FAO's cereal price index edged up 0.7% from January. Wheat prices increased due to tighter supplies in Russia and concerns over crop conditions in eastern Europe and north America, while maize prices continued to rise due to tightening supplies in Brazil and strong U.S. export demand. Conversely, world rice prices fell by 6.8% in February. Meat prices edged down 0.1% on the month. In a separate report, the FAO predicted a modest increase in global wheat production for 2025, estimated at 796 million tonnes, some 1% higher than the previous year. This growth was supported by expected production gains in the European Union, particularly in France and Germany. However, challenges such as dry conditions in eastern Europe and excessive rainfall in western European could impact yields, the FAO warned. In the U.S., wheat acreage was expected to expand, though yields might decline due to drought conditions. Rice production was forecast to reach a record high of 543 million tonnes in 2024/25, driven by positive crop prospects in India and favourable growing conditions in Cambodia and Myanmar. The FAO also revised its estimate for global cereal production in 2024 to 2.842 billion tonnes, marginally higher than the 2023 level. Sign up here. https://www.reuters.com/markets/commodities/world-food-prices-rose-february-back-sugar-rush-uns-fao-says-2025-03-07/