Brazil: Economic growth steps on the gas in February
The Brazilian economy gained notable steam halfway through Q1: Economic activity growth rebounded in February, growing 3.3% month on month in seasonally adjusted terms, which was a notable improvement from January’s 0.1% decline and the strongest increase since June 2020. The upturn, which significantly exceeded market expectations, was chiefly due to a more-robust-than-expected services sector—a large sector in the economy. The agricultural sector also contributed to the positive result.
On an annual basis, economic activity rose at a slightly softer pace of 2.8% in February, down from January’s 3.0%. Still, the trend improved modestly, with annual average growth in economic activity coming in at 3.1%, up from January’s 3.0% reading.
Meanwhile, retail sales posted a marginal month-on-month 0.1% decline on a seasonally adjusted basis in February, deteriorating sharply from January’s 3.8% expansion. Industrial production slid 0.2% month-on-month in seasonally adjusted terms in February, a slightly more moderate fall than January’s 0.3% one.
More positively, industrial output grew 1.1% month-on-month in seasonally adjusted terms in March, improving notably from February’s 0.2% decline, hinting that activity should improve in March.