Sectors which rely on credit have struggled as interests went up. Photo: Joa Souza/Shutterstock
Brazil’s economy is showing signs of a slowdown, according to the latest reading of the Central Bank’s economic activity index (IBC-Br).
The index, considered a reliable predictor of GDP, rose 0.29 percent in December and indicated that the economy expanded 2.9 percent last year. But the results for Q4 2022 were negative, with economic activity falling 1.46 percent in the last three months of the year.
The end of Covid restrictions boosted the economy earlier in 2022, but the data suggests that the momentum may already be over. Economic activity is feeling the effects of Brazil’s monetary tightening process, often maligned by President Luiz Inácio Lula da Silva.
Since March 2021, the Central Bank has raised benchmark interest rates from 2 percent to the current level of 13.75 percent. Retail and industry data also point to a slowdown, especially in segments that rely on credit. The services sector, however, continued to post strong results.
Brazil’s official 2022 GDP reading will be disclosed on March 2 by official statistics agency IBGE.
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