SAO PAULO: The Brazil Central Bank’s Economic Activity Indicator (IBC-Br) declined -0.8% month-on-month (mom) in April for -3.1% year-on-year (yoy).
This was a more significant contraction than the median market projections of -0.4% mom and -2.5% yoy.
Analysts say that the weaker-than-expected IBC-Br figure reinforces a more negative outlook for economic activity in 1H15, which embeds an intensification of the GDP contraction of 1Q15 into the 2Q15.
Stability in the IBC-Br in May and June at the level seen in April would imply a reading of -1.5% qoq for the indicator in 2Q15 or -2.6% yoy in the quarter.
Worse, coincidental indicators for economic activity already released for May (e.g., business and consumer confidence, Anfavea’s car sales indicator) point to a sharper contraction in economic activity in the month than was previously anticipated, implying even further downside risk to Brazil GDP in the quarter.
