Business activity falls in Brazil after growth-PMI
2022.07.08 01:41
Business activity falls in Brazil after growth-PMI
By Ray Johnson
Budrigannews.com – The central bank index showed on Thursday that Brazilian economic activity started the second quarter in a downturn. After performing well in the previous month, economic activity lost steam in April, but forecasts still pointed to stronger activity this year.
A leading indicator of gross domestic product, the IBC-Br economic activity index, decreased by 0.44 percent seasonally adjusted from March.
That followed a gain of 1.09 percent in March over the previous month. Due to a central bank worker strike that ended this week, both figures were released late.
Goldman Sachs economist Alberto Ramos (NYSE: According to GS, the numbers suggest a positive carry-over for the second quarter, which should be aided further by tax reductions and a rapid improvement in the labor market.
“Following the solid expansion of the economy in Q2, we expect the growth to be moderately visible in Q3 and activity to face increasing headwinds as we approach the end of the year,” he wrote in a note to clients, reviewing the revision of this year’s GDP forecast from 1.6% to 2.1%.
He also downgraded the outlook for growth in 2023 from 0.8 percent to 0.7 percent at the same time.
Retail sales exceeded expectations, even though industrial output increased slightly in April compared to March. Services activity grew slightly despite falling short of market expectations.
According to the statement made by the central bank, the IBC-Br index increased by 3.46 percent over the 12 months ending in April and 2.23 percent on a nonseasonally adjusted basis from April 2021.
The Brazilian economy has performed better than the market initially anticipated, despite the need for high interest rates to combat double-digit inflation.
Brazil’s economy will expand by 2% this year, according to Economy Minister Paulo Guedes, whereas the ministry’s official forecast indicates a growth of 1.5%.
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