Brazil: Economic activity declines in August
October 13, 2011
In August, economic activity contracted a seasonally adjusted 0.5% over the previous month, according to the Central Bank's monthly indicator for economic activity (IBC-Br, indice de Atividade Economica do Banco Central). The reading contrasted July's 0.3% expansion and exceeded market expectations of a 0.4% contraction. In fact, the reading represented the sharpest decline in economic activity since December 2008. On an annual basis, economic activity expanded 2.9% in August, which was up from the 1.7% increase recorded in July. However, the trend continued to point downwards, with annual average growth falling from 4.4% in July to 4.0% in August. The IBC-Br is highly correlated to the GDP series and thus represents a good proxy for economic growth.