Brazil’s economy shrinks by almost 1% in January – Central Bank

RIO DE JANEIRO, BRAZIL – The index of economic activity (IBC-Br) fell by almost 1% in January compared to December last year. According to the Index of Economic Activity (IBC-Br) published today (17) by the Central Bank (BC), the decline was 0.99%. With this change, the indicator closed the month at 138.48 points.

In addition to the tax volume, the IBC-Br also includes information on the activity level of the three economic sectors: Industry, Trade and Services, and Agriculture and Livestock.

According to the Central Bank, the IBC-Br recorded a positive change of 0.01% compared to January 2021. Compared to the previous three months, the IBC-Br was 0.19% and the cumulative value for the last 12 months was 4.73%.

The index, which is considered a preview of gross domestic product (GDP), is a way to assess the evolution of Brazilian economic activity and helps the Central Bank to make decisions on the prime rate (Selic), which was set yesterday (16) by the Bank at 11.75% per annum.

GDP FORECAST

On Thursday, the Ministry of Economy lowered the growth forecast for Brazilian GDP this year. With this reduction, the growth estimate decreased from 2.1% to 1.5%. For next year, the forecast of 2.5% growth was maintained.

In addition to the drop in GDP, the government also raised its inflation forecast for this year, as measured by the broad consumer price index (IPCA), from 4.7% to 6.55%.

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