Brazil Factory Output Slows

Brazil’s industrial output expanded in February at the slowest pace in five months, underscoring an uneven pace of economic recovery in the first quarter of the year, Reuters reported. Production rose 2.8% from the year before, government statistics agency IBGE said on Tuesday, far below the median 4% estimate in a Reuters survey of economists. Only one of the 17 respondents in the poll, Haitong, had predicted a smaller increase, a sign that there is still scope for disappointment even after the economy emerged from its deepest recession in decades. Record-low interest rates and slow inflation have boosted consumer spending in Latin America’s largest economies, but companies are still grappling with idle capacity and heavy debt. This should keep the central bank on track to cut interest rates in May to a new all-time low following an unexpected dovish turn in its communication in the wake of stubbornly low inflation. A 16.8% increase in vehicle sales drove the bulk of the industry’s expansion in February, IBGE said. Industrial output rose 0.2% from January, reversing the previous month’s contraction but undershooting a 0.55% consensus estimate for the second month in a row.