Brazil Business Activity in November Grew for 7th Month, but Points to Slower Pace

RIO DE JANEIRO, BRAZIL – The IBC-Br index posted its seventh consecutive monthly rise, according to data released on Monday, January 18th, and rose 0.59% in November. Despite the growth, the rate shows a slowdown compared to preceding months: in October, growth stood at 0.86%, and at 1.29% in September. In June, the strongest month, the increase reached 4.89%.

Known as the Gross Domestic Product (GDP) preview, the IBC-Br assesses economic progress with data on activity levels in the industrial, trade, services and agriculture sectors, in addition to the volume of taxes.

The increase in activity in November was expected as a result of the continued rebound of industry and a stronger growth in services, according to data measured by the IBGE (Brazilian Institute of Geography and Statistics) and was slightly higher than expected by the financial market. According to Bloomberg projections, analysts expected economic activity level at 0.50% in November.

As was the case in the transition from September to October, the deceleration in activity in November is due to the decrease in the value of the emergency aid installments. The aid was paid in five R$600 installments to casual workers affected by the crisis and, between September and October, the amount fell to R$300. The installments were deposited up to December.

In the accumulated 2020, the indicator dropped -4.63%. The data show that despite the rebound observed in recent months, there is a major impact in the drop in supply and demand, triggered by the Covid-19 crisis, particularly in April. The market estimate is that Brazil’s GDP closed 2020 down 4.37%, according to the Focus Bulletin. The consolidated result will only be released by the IBGE in March.

Released monthly, the IBC-Br is considered a gauge of Gross Domestic Product (GDP), which is released quarterly by the IBGE. As there are different methods to calculate economic development, the IBC-Br and the GDP do not always present similar results. The GDP is the sum of all goods and services produced in the country and serves to measure economic development. The IBC-Br uses estimates for sectors and also for taxes. The second quarter GDP result, for instance, reported a 7.7% increase, while the IBC-Br for the same period grew 9.72%.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error