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Brazil Economic Activity January 2023

Brazil: Economic activity flatlines in January

The Brazilian economy started the year on a soft footing: Economic activity recorded flat growth month on month in seasonally adjusted terms in January, which was a deterioration from December’s 0.5% expansion. The moderation in growth was largely due to an underwhelming performance of the services sector—a large sector in the economy. The outturn shows the Central Bank’s aggressive inflation-fighting monetary policy stance was successful.

On an annual basis, economic activity rose at a faster rate of 3.0% in January (December: +0.8% yoy). Accordingly, the trend improved modestly, with the annual average growth of economic activity coming in at 3.0%, up from December’s 2.8% reading.

Meanwhile, industrial output slid 0.3% month on month in seasonally adjusted terms in January (December 2022: -0.1% mom). Conversely, retail sales expanded 3.8% in month on month seasonally adjusted terms in January, rebounding from December’s 2.8% decline.

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