Brazil: Economic activity drops to five-year low
February 14, 2014
In December, economic activity contracted 1.4% 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 followed the 0.6% drop observed in November and marked the sharpest drop in activity since December 2008. The result exceeded market expectations of a 1.0% decrease.
On an annual basis, economic activity increased 0.7% in December, which was below the 1.3% rise tallied in November. Meanwhile, annual average growth ticked up from November's 2.4% to 2.5%.
The Central Bank expects GDP to grow 2.3% in 2014 according to its Inflation Report from December. LatinFocus Consensus Forecast panelists expect the economy to expand 2.1% in 2014, which is down 0.2 percentage points from last month's estimate. For 2015, the panel sees GDP growth at 2.3%.
Author: Carl Kelly, Economist