Brazil economic activity rises 0.3% in August, in line with forecasts

what happened

Economic activity in Brazil increased by 0.3% in August from the previous month after seasonal adjustment, according to a central bank index released on Friday. The IBC-Br index serves as a proxy for gross domestic product and is built from the bank's estimates for agriculture, industry and services, along with production-linked taxes. The reading matched the median forecast of economists in a Reuters poll, TradingView reports.

Industry was the main driver, expanding 0.9% from July. Without seasonal adjustment, the index climbed 1.2% from a year earlier, and on a rolling 12-month basis through August it rose 1.6%.

The central bank expects GDP growth of 1.8% this year and 1.4% in 2027. It has argued that slower economic activity is needed for inflation to return to its 3% target. Policymakers meet in early November after five consecutive 25-basis-point rate cuts, which brought the benchmark Selic rate to 13.75%.

why it matters

For markets, the data show moderate growth while the central bank keeps its easing path in view. The real and Brazilian equities usually respond to such releases through rate expectations, so a reading in line with forecasts brought no major surprise.

market impact

Real and Brazilian stocks: data were expected, effect limited to expectations for the Selic rate

tags

instruments