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(Source: Nasdaq)
Industrial production in Brazil remains unchanged in January from December, the statistical agent of the IBGE government said on Tuesday, estimating market estimates as an indicator of continuing to sign a slowdown in the local economy.
The January figure follows three consecutive months from the negative reading because the Brazilian industry wrestles with high interest rates, with this sector loss of steam in recent months even though 2024 is strong as a whole.
The economist surveyed by Reuters expects expansion of 0.5% month to month in January.
Production rose in three of the four main categories surveyed by IBGE, with capital goods prominent after the decline in the previous two months, but the decline in the output of intermediary goods burdened the overall index.
Industrial production in January grows 1.4% every year. But the market expects expansion of 2.3%, according to Reuters’ opinion.
“This is a bad beginning for this year,” said Andres Abadia from Pantheon Macroeconomics. “Industrial slowdown is likely to continue in Q1, due to very high interest rates, the weakening of global demand and growth that is less supportive in weighing activities.”
Brazilian benchmark interest rates currently reach 13.25% and the central bank has written an additional 100 basis points for its meeting at the end of this month because it tried to tame increased inflation.
Policy makers have witnessed the signs of moderation carefully but noted that it is still too early to build a clear slowdown trend.
Source: Reuters (reporting by Gabriel Araujo; Editing by Mark Porter)
