The highlights from the first week of April were the releases of activity data, which indicates economic recovery is happening a slow pace, in addition to IPCA inflation data.
Brazilian industrial production increased by 0.1% in relation to January but was lower than expected
Industrial production grew 0.1% in February and was below expectations of a 0.6% increase. In the first two months of 2017, industrial production recorded an advance of 0.3%. Compared to February 2016, manufacturing activity fell 0.8% and, in the 12-month measure, industrial production fell 4.8%, keeping up the decline that began in June 2016 (-9.7%).
Among top-level economic categories, durable consumer goods (7.1%) and capital goods (6.5%) had the strongest increase in February. Intermediate goods (0.5%) also progressed with their fourth consecutive increase. On the other hand, the semi-durable and non-durable consumer goods sector dropped by 1.6% in February, returning part of the accumulated 7.2% gain in the months of December last year and January 2017.
The production of automobiles and clothing were highlights within sectors. On the other hand, among the 11 sectors in which production fell, the standout was the fall of food products (-2.7%), which broke two months of increases and also non-durable goods, which fell by 1.6%. The result of industrial production in February indicates the difficulty the Brazilian economy is facing with a sustained rebound.
In March, IPCA inflaton slows to its lowest level in five years
In March the IPCA inflation measure increased by 0.25%. Food and housing exerted the most pressure on the index, but these were offset by deflation in clothing and transportation. Core measures rose 2.9% in the annualised quarterly moving average and continue to signal low and stable inflation.
The diffusion index also indicates widespread disinflation and recorded 55.8% of items with price changes – the average of the last four years in March was 71%. For the month of April, inflation should remain stable and increase 0.14% due to the implementation of an energy tariff discount, which is expected to decline by 6.5% and impact the total index by 0.22%.
That was last week, but let’s not dwell on the past, make sure you click here to see what is happening in the second week of April.