By Jay Forte, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The the Brazilian Institute of Geography and Statistics (IBGE) announced today (November 4th) in their Monthly Industrial Survey that production of Brazilian industry in September fell by 0.2 percent compared to August. In comparison with the same month last year, the result was -2.1 percent.

Low prices for commodities are a serious risk for Latin American countries' economy, including Brazil, photo by: Roosewelt Pinheiro/Agência Brasil
The main sectors that contributed to the fall were food products, down 4.1 percent, photo by Roosewelt Pinheiro/Agência Brasil.

So far in 2014, industrial production is down 2.9 percent, and in the past twelve months, down 2.2 percent. In the third quarter of this year, the decline was -3.7 percent compared to the same period of 2013.

David Rees, Emerging Markets Economist for Capital Economics said, “September’s Brazilian industrial production data suggest that the sector remained a drag on the overall economy in the third quarter and, with both domestic and external demand set to remain weak, it is unlikely to take over as a driver of growth in the coming quarters.”

The main sectors that contributed to the fall were food products, down 4.1 percent, and petroleum products and biofuels, with -1.3 percent. On the other hand, the results showed the sectors of automotive vehicles, truck bodies and trailers, up 10.1 percent, and the same growth for pharmaceutical and chemical pharmaceutical products.

Mr. Rees added, “Looking ahead, we see little chance of industry making a significant contribution to GDP growth over the coming quarters. […] More generally, domestic demand has weakened significantly in recent months and, with consumers battling to overcome high inflation and tighter credit conditions, it looks set to remain depressed.”

In addition, President Dilma Rousseff’s narrow victory in the presidential elections has reduced the hopes of many economic analysts that in the next four years the government will produce the economic policy reforms Brazil needs to restore investor confidence and resume economic growth.

3 COMMENTS

  1. For the Brazilian people who lived under the former military dictatorship, the country has since come a long way in lifting the poor and hopeless out of extreme poverty and into the emerging Middle Class, thanks to Lula and Dilma. They did it through peaceful revolution. As the Brazilian dream lives on and continues to grow, here in the U.S.A., we face inequality not seen for a hundred years as we regress to the age of the robber barons. Brazil may be going through some difficult times for now, but overall, they’re in much better shape than the crumbling U.S.

  2. Lorenz: It is shocking the difference in political maturity in Brazil versus the US. Still…as violent as the U.S. is, the crime statistics in Brazil are so bad that it will impact the economy.

    I would actually love to live in Rio (would take a lottery prize, though) but the stories are…sobering.

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