Brazil’s economic activity rose 0.4% in August compared with the previous month, falling short of the 0.6% increase economists had forecast, according to data from the central bank’s IBC-BR index released Thursday.
The index, which serves as a monthly proxy for GDP, combines estimates from agriculture, industry, services, and production-related taxes.
Only the agriculture sector contracted in August, declining 1.9% from July, while industry and services contributed to the modest growth. On a year-on-year basis, the IBC-BR index rose 3.2%, based on non-seasonally adjusted data.
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Despite the slower-than-expected expansion, Brazil’s central bank has maintained its benchmark Selic interest rate at 15%, the highest in nearly 20 years, emphasizing the need for stability to bring inflation down to the 3% target.
Central Bank Director Paulo Picchetti dismissed the idea of a recession, stressing that the slowdown is part of a controlled cooling of the economy. However, Finance Minister Fernando Haddad and some economists caution that the high borrowing costs remain restrictive, potentially slowing growth further, even as core inflation remains elevated.
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The August data highlights a gradual slowdown in Brazil’s economy, reinforcing debates over the balance between controlling inflation and supporting economic activity amid tight monetary policy.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
