Brazilian economy retreated in Q1 2018

May 17, 2018 by admin    No Comments    Posted under: Economy

Brazilian economy dropped 0.74% in March compared to February, which led the first quarter activity to fall in relation to the last three months of last year, according to numbers released on May 16^th. by the Central Bank (CB).

As a result, the IBC-Br (Economic activity index of CB) indicator, designed to try to replicate GDP behavior, fell 0.13% in relation to the last quarter of 2017.

The CB also reduced the February indicator, which previously showed an increase of 0.09% in comparison with January and now shows a fall of 0.1% in the same comparison.

With the irregular recovery of the economy, the market analysts consulted by the Central bank in the Focus bulletin have reduced their projections for this year’s GDP week by week.

In the latest survey, average expectations for 2018 fell to 2.51%, up from 2.76% four weeks ago.

Evolution of GDP

Source: Central Bank of Brazil

The erratic behavior of the economy can also be observed in IBGE (Note: Brazilian statistic office) data for industry services and commerce.

In March, the industry had a fall of 0.1% frustrating market expectations, which expected an increase of 0.5%. The drop was caused by a decline in the intermediate goods sector, which corresponds to 60% of the domestic industry.

In the first quarter, the Brazilian industry grew by 3.1%, compared to the same period of the previous year, a slower pace than in the previous quarter, when the growth was 4.9%.

In the case of services, there was a decrease of 0.2% in relation to February, against the expectation of analysts consulted by Reuters of a decline 0.5%.

As a result, the services sector shrank 0.9% in the last quarter over the immediately preceding period. In the fourth quarter of 2017, activity had grown 0.5%.

In the case of retail, sales grew by 0.3% in March compared to the previous month.

In this way, retail sales ended the first quarter of this year with a 0.7% increase in sales over the fourth quarter of last year, when there was stability.

Source: www.folhadesaopaulo.com.br