Brazil’s economy has been one marked by steady, but slow, recovery this year. Now that a recession is in the rearview mirror, the country has shifted its focus to keeping inflation in check while goading further growth, which could reap benefits for its exchange traded funds (ETFs).

Gerald Jeffries for The Wall Street Journal reports that the threat of inflation is low, now that the economy seems to be stable, and improving. Brazil’s economy is showing consistent signs of recovery but still idle use of capacity is helping maintain low inflation pressure, Brazil’s central bank said Thursday. The country’s reference Selic interest rate was left unchanged at a record low 8.75% annually for a third consecutive meeting.

According to the Brazilian Census Bureau,  retail sales rose strongly in October, marking the sixth consecutive month of gains as consumer demand continues to lead a recovery in Latin America’s largest economy. [Why Brazil’s potential is not even fully realized.]

October retail sales rose 1.4% from September and jumped 8.4% from October 2008, reports Alastair Stewart for The Wall Street Journal. Retail sales, specifically supermarket sales, have been sustained by the population’s improved spending power fostered by economic stability and steady growth over the past six years. [Why the Brazilian economy is just igniting.]

Meanwhile, Brazil sold their bonds to yield 4.75%, down from 6.13% in an initial offering in January and from 5.80% in a second sale in May. The Brazilian government stated that plans to sell up to $25 million of the securities in Asian markets were next. Financial Reports says that the drop out in Dubai is being used as an opportunity to issue now,  versus a potentially more volatile backdrop next year. [Why Brazil is the emerging market leader.]

For more stories about Brazil, visit our Brazil category.

  • iShares MSCI Brazil (NYSEArca: EWZ): up 112.4% year-to-date

  • iShares JP Morgan USD Emerging Markets Bonds (NYSEArca: EMB): up 15.3% year-to-date; 10.7% of Brazil bonds

  • Market Vectors Brazil Small Cap (NYSEArca: BRF): up 18.7% in the last three months

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.