Brazil: Economic activity contracts less than expected
September 13, 2013
In July, economic activity fell 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). While the figure contrasted the 1.0% expansion observed in June, it fell less than the 0.9% contraction the market had expected.
On an annual basis, economic activity expanded 3.4% in July, which was above the 2.4% increase tallied in June. The upward trend continued, with annual average growth rising from 1.9% in June to 2.1% in July, the highest level in 16 months.
The Central Bank expects GDP to grow 2.7% in 2013, according to its Inflation Report from June. LatinFocus Consensus Forecast panelists expect the economy to expand 2.4% in 2013, which is up 0.1 percentage points from last month's estimate. For 2014, the panel sees GDP growth accelerating to 2.5%.
Author: Carl Kelly, Economist