Brazil’s industrial production rebounded less than economists forecast in March as the world’s second-biggest emerging market continues to respond slowly to government stimulus measures.
Industrial output rose 0.7 percent in March after falling a revised 2.4 percent in February, the national statistics agency said today in Rio de Janeiro. The March number was lower than all but one estimate from 33 analysts surveyed by Bloomberg, whose median forecast was for a 1.3 percent jump. Production contracted 3.3 percent from the year before, the biggest drop since December 2012, compared with a median forecast for a 2.4 percent fall from 30 economists.
President Dilma Rousseff’sadministration has worked to revive Brazilian industry by extending tax reductions and cutting electricity tariffs in a bid to spur economic recovery. Accelerating inflation prompted the central bank last month to raise its benchmark rate for the first time since July 2011, to 7.50 percent, after keeping it at a record low since October.
“We should see the number today as pointing toward a moderate recovery,” Roberto Padovani, chief economist at Votorantim CTVM Ltda, said by telephone from Sao Paulo. “We do have a recovery, but it’s weak.”
Swap rates on the contract maturing in January 2014, the most traded in Sao Paulo today, rose four basis points, or 0.04 percentage point, to 8.23 percent at 9:45 a.m. local time. The real strengthened 0.1 percent to 2.0068 per U.S. dollar.
Vehicle production, which last month fell the most since January 2012, rose 5.1 percent in March from February. Consumer goods output increased 1.4 percent, while capital goods rose 0.7 percent, the agency said. Production rose in 13 out of 27 industrial groups contracted.
Inflation quickened to 6.51 percent in the 12 months through mid-April, exceeding the government’s target range of 4.5 percent plus or minus two percentage points. Brazil’s economy grew 0.9 percent last year, less than the U.S. and its peers in the BRIC group that includes Russia, India and China.
Economists in the most recent survey by the central bank forecast growth of 3 percent this year, and inflation of 5.71 percent. Brazil will release first quarter GDP data on May 29.
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