Brazil’s IBC-Br economic activity index beats expectations in February

BRASILIA – Economic activity in Brazil returned to growth in February, but at a slower pace than expected, according to data released Monday by the central bank.

The IBC-Br economic activity index, a leading indicator of gross domestic product, rose 0.34% in February from the previous month, below a 0.5% increase expected by economists, according to a Reuters poll.

In contrast, the central bank revised the January decline to 0.73%, better than the 0.99% contraction reported earlier.

In February, retail sales and industrial production exceeded expectations, while the performance of the services sector was below expectations.

Persistent inflation and double-digit interest rates are expected to weigh on Latin America’s largest economy this year. The government, however, has argued that a stronger labor market and higher private investment will support more robust growth.

The IBC-Br index rose 0.66% on an unadjusted basis from February 2021, while in the 12 months to February the index rose 4.82% , the central bank said.

The Economy Ministry lowered its GDP growth forecast to 1.5% this year from 2.1% previously, but the figure remains well above most analysts’ projections.

(Reporting by Marcela Ayres, editing by Mark Potter)