Real GDP growth in Q4 2017 came in below our expectations, at just +0.1% q/q (after +0.2% in Q3), with a high contribution of investment growth (+0.3pp). That took full-year 2017 growth to +1%, with all four quarters posting positive increases. The recovery in private consumption and the change in inventories were the main drivers of the annual change. Investment subtracted -0.3pp from the annual growth performance despite growing in the last three quarters, mostly because of a strong negative carryover at the end of 2016. In 2018, we expect around +2.5% real GDP growth in Brazil on the back of (i) low inflation (+2.9% in January) which should support further real wage growth; (ii) easing lending conditions (lower lending rates at 26.3% in January, down from a high of 33.4% in October 2016); (iii) recovering credit; and (iv) recovering investment (after more than 3 years of decline). The adoption of further structural reforms will be key to lift the country’s potential growth.