Economy

Brazil's economic activity grows again in April but remains below expectations, says cenbank

The IBC-Br index, considered a sign of the country's GDP, rose 0.44% in April compared to the previous month in seasonally adjusted data

Photo: REUTERS/Carla Carniel
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  • Brazil’s Central Bank’s Economic Activity Index rose 0.44% in April compared to the previous month in seasonally adjusted data;
  • The index showed growth again after falling 1.6% in March, when it halted 10 months of advances as Brazil became the epicenter of the pandemic.

The Brazilian economic activity registered growth again in April, albeit below expectations, starting the second quarter in search of resuming recovery after the worsening of the pandemic in Brazil.

Brazil‘s Central Bank’s Economic Activity Index (IBC-Br, in Portuguese), considered a sign of the country’s GDP, rose 0.44% in April compared to the previous month in seasonally adjusted data, informed the Brazilian Central Bank on Monday.

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The index showed growth again after falling 1.6% in March, when it halted 10 months of advances at the moment when the country became the epicenter of the coronavirus pandemic.

But with heavy restrictions still in place in many places due to rising coronavirus cases, April’s result came in below expectations in a Reuters poll of a 0.55 percent expansion.

The rise in the month comes after Brazil‘s GDP posted 1.2% growth in the first quarter, higher than expected, with the economy returning to pre-pandemic levels.

Compared to April 2020, the height of the losses due to Covid-19, the IBC-Br jumped 15.92%, due to the low comparison base. In the accumulated in 12 months the IBC-Br fell 1.20%. Both data are in observed numbers.

In an environment still of concerns and restrictions from the Covid-19 pandemic in the country, the production of the Brazilian industry contracted 1.3% in April, being 1% below the pre-pandemic level.

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On the other hand, retail sales and the volume of services grew more than expected in April. Retail registered the highest increase in 21 years for the month, at 1.8%, while services grew 0.7%, although the sector is below the pre-pandemic level.

Estimates for Brazil‘s economic growth in the Focus survey from Brazil‘s Central Bank have been increasing, and experts consulted now see GDP growth of 4.85% this year, growing by 2.20% in 2022.

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