BRASILIA (Reuters) – Brazil’s economic activity rose more than expected in February, central bank data showed on Friday, despite expectations for a slowdown during one of the world’s most aggressive monetary tightening cycles to tame inflation.
The IBC-Br index, a key gauge of gross domestic product (GDP), grew 0.4% from January on a seasonally adjusted basis, outpacing the 0.15% rise forecast in a Reuters poll of economists.
The index aggregates data from agriculture, industry, and services sectors, along with tax data on production.
A breakdown of the data, released for the first time by the central bank, showed the February gain was largely driven by a 5.6% jump in agricultural activity.
Excluding that, the index would have shown a 0.2% decline for the month, the central bank said.
On a non-seasonally adjusted basis, the IBC-Br rose 4.1% from February 2024 and climbed 3.8% in the 12-month period.
The central bank has said it is closely monitoring economic activity as it presses ahead with its tightening cycle, which has raised the benchmark Selic rate by 375 basis points since September to 14.25%, with another hike already flagged for May.
Earlier this month, Finance Minister Fernando Haddad projected that Latin America’s largest economy will expand by 2.5% in 2025, down from 3.4% last year.
But the projection is still more optimistic than the 1.97% forecast by economists surveyed weekly by the central bank.
(Reporting by Marcela Ayres; Editing by Sharon Singleton and Jane Merriman)
