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Brazil Economic Activity April 2024

Brazil: Economic activity downbeat in April

The economy got off to a slow start in the second quarter: Economic activity flatlined in month-on-month seasonally adjusted terms in April, undershooting market expectations for a second month (March: -0.4% mom s.a.).

On an annual basis, economic activity rose 4.0% in April, contrasting March’s 1.7% fall and marking the best result since March 2023. Meanwhile, the annual average of economic activity was steady at March’s 1.8% in April.

Looking at sectoral data, services output growth slowed to 0.5% month on month in seasonally adjusted terms, down from March’s 0.7% increase. Meanwhile, retail sales growth accelerated to 0.9% month on month in seasonally adjusted terms in April, up from March’s 0.3% rise; despite the improvement, the reading missed market expectations. Conversely, in the same month industrial output fell 0.8% month on month on a seasonally adjusted basis, deteriorating from the prior month’s 1.1% expansion. In May, industrial output deteriorated further and declined 0.9% month on month, suggesting economic activity growth may have remained constrained in that month.

Our Consensus is for GDP growth to have slowed in sequential terms in the second quarter, following an unusually robust upturn in the first quarter. The fallout from the devastating floods in Rio Grande do Sul—the country’s largest rice-producing region—in April–May will have likely dented growth.

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