Brazil Economic Activity

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Brazil: Contraction in economic activity worsens in June

August 19, 2014

In June, economic activity fell 1.5% over the previous month in seasonally-adjusted terms, according to the Central Bank’s monthly indicator for economic activity (IBC-Br, Indice de Atividade Economica do Banco Central). The figure marked a deterioration over the 0.8% drop tallied in May and represented the sharpest drop since May 2013. The result came in slightly below market expectations of economic activity dropping a softer 1.4%.

On an annual basis, economic activity contracted 2.1% in June, which was well below the 0.2% drop tallied in May. Meanwhile, annual average growth fell from 1.9% in May to 1.5% in June, which is the lowest level since March 2013.

The Central Bank’s Inflation Report from June indicates that it expects GDP to grow 1.6% in 2014 and to accelerate to a 1.8% expansion in 2015. LatinFocus Consensus Forecast panelists expect the economy to expand 1.2% in 2014, which is down 0.3 percentage points from last month’s estimate. For 2015, the panel sees GDP growth at 1.6%.


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Brazil Economic Activity June 2014

Note: Month-on-month changes of seasonally adjusted IBC-Br (Indice de Atividade Economica do Banco Central) and annual average growth rate in %.
Source: Central Bank of Brazil.


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