Brazil's economic activity falls in February by most in nine months

15 Apr 2019

Brazil's economic activity falls in February by most in nine months

SAO PAULO (Reuters)Brazilian economic activity contracted in February by the most in nine months, a central bank indicator showed on Monday, adding to concerns about a sluggish start to the year for Latin America's largest economy.

The central bank's IBC-BR economic activity index, a leading indicator of gross domestic product (GDP), fell 0.73 percent in February from January. That followed a revised drop of 0.31 percent in January, a smaller contraction than first reported.

"Economic indicators so far continue to suggest a slight drop of 0.1 percent for GDP in the first quarter of this year," Bradesco economists wrote in a note.

The data adds to pressure on new President Jair Bolsonaro to reignite an economic recovery which has been lackluster since Brazil's deep 2015-2016 recession. The cornerstone of Bolsonaro's economic agenda is a pension reform bill aimed at restoring public finances, which received a rocky reception in Congress.

Treasury Secretary Mansueto Almeida told Reuters last week that Brazil must stick to its fiscal commitments and cut public spending for the long-term benefit of the country, even if that has a detrimental short-term effect on the economy.

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