Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
 | 
Last updated 45 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
HOME LOCAL MIDEAST ASIA WORLD BUSINESS SPORT OPINION WRITERS
Brazil industrial output falls 2.5%
April 04, 2013
 Print    Send to Friend

SAO PAULO: Brazilian industrial output shrank more than expected in February, reversing most of the previous month’s gains and casting fresh doubt over the health of a meager recovery in the struggling sector.

Industrial production fell a seasonally adjusted 2.5 per cent in February from January, more than the 2.05 per cent drop forecast in a Reuters poll, government statistics agency IBGE said on Tuesday.

“The data came in bad, but it wasn’t that much of a surprise...the industrial recovery remains quite fragile,” said Daniel Cunha, an economist with XP Investimentos in Rio de Janeiro.

“The good news is that it showed a more favourable trend for capital goods.”

The data also reinforced bets that Brazil’s central bank would not raise interest rates at its next policy meeting in April despite quickening inflation, for fear of putting the economy’s fragile recovery at risk.

Yields on interest rate futures dropped in early trading on Tuesday, with the yield on contracts maturing in January 2014, the most traded in the session, down 4 basis points to 7.74 per cent.

Production of capital goods rose for the second straight month, adding 1.6 per cent in February from January. Capital goods production had suffered in the previous year as a lack of business confidence led companies to hold off on making investments.

Brazil’s economic growth has been limited by its manufacturing sector in recent years, as industry struggles with infrastructure bottlenecks, chronically low levels of investment and rising labor costs.

February’s industrial production shrank 3.2 per cent over the same month a year ago, greater than the 2.4 per cent decline forecast in the survey.

President Dilma Rousseff’s government has attempted to revive the sector with stimulus measures, trade barriers and tax breaks. After a 2.7 per cent contraction in 2012, economists expect industrial output to grow 3.12 per cent this year, according to the median forecast in a central bank poll.

Industrial production had risen more than expected in January, bolstered by surging capital goods output as government stimulus boosted sales of heavy trucks.

IBGE revised January’s data on Tuesday to show a 2.6 per cent rise from December, up from a previously reported 2.5 per cent.

Analysts said those gains were mostly a one-off occurrence, and that February’s numbers better reflected the challenges still facing Brazilian industry as the effects of stimulus wear off.

“The data erased nearly everything we gained in January, but those gains were mostly seasonal, with the refilling of stocks after the holidays, and the effects of the government stimulus on autos,” said Mariana Hauer, an economist with Banco ABC Brasil in Sao Paulo. “I don’t think we’re seeing a recovery yet.  The data shows we are still very stagnated and the drop was very disseminated across the sectors.”

Reuters

Add this page to your favorite Social Bookmarking websites
Comments
 
Post a comment
 
Name:
Country:
City:
Email:
Comment:
 
    
    
Related Stories
Brazil’s current account deficit climbs to highest level in 13 years
BRASILIA: Brazil’s trailing 12-month current account deficit climbed to its highest in more than a decade in November, highlighting the erosion in the country’s external ..
CSN, partners agree on new unit
RIO DE JANEIRO: Cia Siderurgica Nacional (CSN), Brazil’s largest diversified steelmaker, and a group of Asian partners agreed on Friday to move forward with a merger of t..
Brazil auto output, sales slip in November
SAO PAULO: Automobile production and sales in Brazil slipped in November, suggesting the usual acceleration in year-end demand was not enough to save the market from its ..
Brazil ups monetary tightening
BRASILIA: Brazil raised its key interest rate to a three year high, accelerating monetary tightening in a bold move to quell inflation and reinforce President Dilma Rouss..
Brazil scrapes out of recession on government spending in third quarter
BRASILIA: Brazil’s economy crawled out of a recession in the third quarter as public spending rose before presidential elections, suggesting growth could be short-lived a..
 
FRONTPAGE
 
GALLERY
 
PANORAMA
 
TIME OUT
 
SPORT
 
 
Advertise | Copyright