Brazil’s economic activity index rose more than economists forecast in November, as the world’s second-biggest emerging market continues an uneven recovery from a slowdown lasting more than a year.
The seasonally adjusted economic activity index, a proxy for gross domestic product, rose 0.4 percent in November after increasing a revised 0.4 percent in October, the central bank said today in a report posted on its website. The number was higher than predicted by all but 3 of 26 analysts surveyed by Bloomberg, whose median estimate was for a 0.2 percent rise. The non-seasonally adjusted index rose 2.76 percent from a year ago.
Since August 2011, President Dilma Rousseff’s administration has taken steps to buoy Brazil’s $2.5 trillion economy, which is forecast to have grown last year at the slowest pace since 2009. Stimulus measures including tax cuts, record-low interest rates and plans to reduce energy costs have not offset the effects of falling investments and flagging business confidence. Still, policy makers are expected to keep borrowing costs on hold at 7.25 percent today, as inflation accelerates.
Some sectors of Brazil’s economy have been slow to respond to government actions. Industrial production fell in November for the second time in three months on a decline in capital goods. Retail sales grew for the sixth consecutive month in November, the pace of increase slowed for the first time since August.
Consumer prices in December increased at the fastest pace since March 2011 on higher personal expenses. Analysts expect inflation in 2013 will remain above the midpoint of the 4.5 percent target for the fourth year in a row, according to the latest central bank survey of about 100 economists.
The central bank last month cut its 2012 growth forecast to 1 percent, down from 2.7 percent in 2011 and 7.5 percent in 2010. Growth in the world’s sixth-largest economy will rebound to 3 percent to 4 percent this year, Finance Minister Guido Mantega said on Dec. 27.