Brazil Economic Activity


Brazil: Economic activity weakens in August

October 29, 2014

In August, economic activity rose 0.3% 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 marked a deterioration from the 1.5% expansion tallied in July. The August result mirrored market expectations.

On an annual basis, economic activity contracted 1.3% in August, which was a deterioration from the 0.2% drop tallied in July. Meanwhile, annual average growth fell from 1.2% in July to 0.9% in August, which is the lowest level since December 2012. Brazil’s economy is in a technical recession and the downward trend in economic activity points to a struggling recovery.

The Central Bank’s Inflation Report from June indicates that it expects GDP to grow 1.6% in 2014 and to accelerate to a 1.8% expansion in 2015. LatinFocus Consensus Forecast panelists expect the economy to expand 0.3% in 2014, which is unchanged from last month’s estimate. For 2015, the panel sees GDP growth at 1.1%, which is down 0.2 percentage points from last month’s Consensus.

Author: Angela Bouzanis, Senior Economist

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Brazil Economic Activity Chart

Brazil Economic Activity August 2014

Note: Month-on-month changes of seasonally adjusted IBC-Br (Indice de Atividade Economica do Banco Central) and annual average growth rate in %.
Source: Central Bank of Brazil.

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