Brazil’s economy in May rebounded less than forecast by analysts as a political crisis engulfs Latin America’s biggest market already heading toward its worst recession in 25 years.
The economic activity seasonally-adjusted index, a proxy for gross domestic product, rose 0.03 percent in May from the prior month after dropping a revised 0.88 percent in April, the central bank said Friday. The median estimate of 29 economists surveyed by Bloomberg was for an increase of 0.2 percent.
Brazil’s government is curtailing expenditures and boosting borrowing costs as it struggles to shrink the budget deficit and slow above-target inflation. President Dilma Rousseff’s economic team says that these are necessary adjustments that will improve investor confidence and pave the way for recovery in 2016.
The non-seasonally adjusted economic index fell 4.75 percent from a year ago, compared with a median estimate of a 4 percent drop.