Brazil’s Economic Activity Index Rises 0.1% in May, Beating Expectations

Brazil’s economic activity expanded modestly in May, supported by gains in industry and services, according to data released by the Central Bank of Brazil (Banco Central do Brasil).

The IBC-Br Economic Activity Index, widely regarded as a proxy for gross domestic product (GDP), increased 0.1% from April on a seasonally adjusted basis. The reading slowed from the revised 0.5% growth recorded in the previous month but came in slightly above market expectations, which had projected no monthly change.

Industrial activity rose 0.4%, matching the pace recorded in April, while the services sector expanded 0.1%, easing from a 0.3% increase in the previous month.

The taxes index, another component of the indicator, also advanced 0.1% after rising 0.3% in April.

In contrast, the agriculture and livestock sector contracted 1.0% in May following a flat reading in April, partially offsetting gains in other segments of the economy.

Excluding agriculture and livestock, the IBC-Br increased 0.2% during the month, indicating that economic activity remained supported by domestic sectors despite weaker agricultural performance.

The IBC-Br is closely monitored as an early indicator of Brazil’s economic performance ahead of the release of official GDP figures.