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BR: Economic Activity Index
Highlights
The Central Bank's Economic Activity Index (IBC-Br), often seen as a proxy for GDP, fell by 0.5 percent month-over-month, deeper than both the prior revised figure of minus 0.3 percent and the consensus forecast. This marks a continued contraction in short-term activity, underscoring weakness in domestic demand and industrial output.
On an annual basis, the index grew by 1.1 percent, slightly below the consensus and down from the prior month's 1.5 percent. The softening year-over-year pace suggests that while Brazil's economy remains in positive territory, growth is losing steam amid tighter financial conditions and external headwinds.
The figures add pressure on policymakers to balance inflation control with growth support since they are yet to meet the 4.5 percent inflation target. The July downturn may temper expectations for a robust second-half rebound. Investors and businesses are likely to remain cautious until clearer signals of stability emerge, particularly as Brazil continues to navigate global uncertainties and domestic structural challenges.