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Brazil Economic Activity December 2023

Brazil: Economic activity grows at fastest pace since April in December

Economic activity rose 0.8% in month-on-month seasonally adjusted terms in December, which followed November’s upwardly revised 0.1% increase. December’s figure marked the best reading since April and beat market expectations.

On an annual basis, economic activity rose 1.4% in December, which was below November’s 2.4% expansion. Still, the trend was unchanged, with the annual average of economic activity coming in at November’s 2.4% in December.

Meanwhile, retail sales swung back into a contraction in December from the prior month’s 0.1% increase and posted a 1.3% seasonally adjusted month-on-month decline—the sharpest in a year.

More positively, industrial output growth accelerated to 1.6% in seasonally adjusted month-on-month terms in December from November’s 0.6% increase. Moving to January, industrial production tallied a 1.6% contraction. January’s downturn was the worst since April 2021.

Available data for Q1 is encouraging as both the manufacturing and services PMIs moved gradually deeper into expansionary territory through February. Activity will be supported by the Central Bank’s aggressive loosening cycle in later months once the impact begins to be felt in the real economy.

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