GDP preview: IBC-Br rises 0,90% in January and exceeds expectations, shows Central Bank.
Compared to the same month of the previous year, the IBC-Br rose by 3,6%, while the accumulated gain over 12 months was 3,8%.
Reuters - The Central Bank's Economic Activity Index (IBC-Br), a leading indicator of Gross Domestic Product (GDP), registered an advance of 0,90% in January compared to the same period last year (Reuters). The IBC-Br advanced in January, showing that economic activity started 2025 stronger than expected even amidst a restrictive monetary policy environment, the Central Bank's indicator showed on Monday.
The Central Bank's Economic Activity Index (IBC-Br), considered an indicator of Gross Domestic Product (GDP), rose 0,9% in January compared to the previous month, in seasonally adjusted data.
The data released by the Central Bank was well above the expectation in a Reuters survey of an increase of 0,22%.
The monthly result showed a strong recovery after the 0,6% contraction recorded in December, a figure revised by the Central Bank from a previously reported 0,7% drop.
Compared to January of the previous year, the IBC-Br index rose by 3,6%, while the accumulated increase over 12 months was 3,8%, according to observed figures.
GDP closed 2024 with growth of 3,4%, according to IBGE data. Analysts now expect the economy to lose momentum as it begins to feel the effects of the monetary tightening implemented by the Central Bank, although a positive agricultural harvest should be favorable to activity at the beginning of this year.
The Central Bank will meet again this Tuesday and Wednesday to decide on the benchmark Selic interest rate, currently at 13,25%, against a backdrop of high inflation and a devalued real. The Central Bank has already indicated a further 1 percentage point increase this week.
The January IBC-Br result exceeded expectations despite weak results from industry, retail, and services during the month.
The volume of services fell by 0,2% in January, while retail sales registered a drop of 0,1%. Industrial production in Brazil, in turn, disappointed expectations and remained stagnant in January.
A Focus survey conducted by the Central Bank on Monday showed that the market expectation for GDP growth in 2025 is 1,99%, rising to 1,60% in 2026.
The IBC-Br is constructed based on proxies representative of the volume indices of agricultural, industrial, and service sector production, in addition to the volume index of taxes on production.
