Brazil's 10-year government bond yield bottomed below 13%, moving away from an over six-year high of almost 14% reached November 23th, as worsening economic conditions in the South American country prompted some rush for safety. Brazil's economic growth slowed more than expected in the third quarter of 2022 as tightening financial conditions dented household spending, underscoring challenges facing President-elect Luiz Inacio Lula da Silva in 2023. Despite this recent pullback, Brazil's long-dated government bond yields are expected to remain somewhat elevated amid mounting concerns about Brazil's public finances. Lula is considering increasing public spending despite warnings about rising debt levels after significant outlays through the pandemic. On the policy side, Brazil's central bank has already pushed interest rates to 13.75% from a record low of 2% in March last year while hinting at cutting rates from June 2023 despite uncertainty regarding the inflation path.
Historically, the Brazil Government Bond 10Y reached an all time high of 18.44 in November of 2008. Brazil Government Bond 10Y - data, forecasts, historical chart - was last updated on December of 2022.
The Brazil Government Bond 10Y is expected to trade at 13.95 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 14.84 in 12 months time.