Brazil: Economic activity slows in May
July 13, 2011
In May, economic activity expanded a seasonally adjusted 0.2% 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 was below April's 0.4% month-on-month rise as well as market expectations of a similar increase. A quarter-on-quarter analysis suggests that economic growth is stabilizing, as the three-month moving average of economic activity expanded 1.3% in seasonally adjusted terms in the three months to May, unchanged from the February-April pace. The IBC-BR is highly correlated to the GDP series and thus represents a good proxy for economic growth. On an annual basis, economic activity expanded 4.2% in May, up from the 2.5% increase tallied in April. Nonetheless, the trend continues to point downwards, with annual average growth falling from 5.7% in April to 5.3% in May.