Brazil Recovery Hits a Bump

Economic activity in Brazil barely expanded in February after contracting the month before, central bank data showed on Monday, suggesting the recovery hit a bump in the first months of the year, Reuters reported. The central bank’s economic activity index rose 0.09% from the month before, less than the 0.15% median estimate in a Reuters survey of economists. The bank also revised the January reading to show a larger contraction of 0.65%, compared to the previously published 0.56% decline, adding to a string of weak readings on retail sales and services activity suggesting sluggish first-quarter economic growth. This highlights an uneven pickup from the deepest recession in decades, which slashed Brazil’s gross domestic product by 8% between the fourth quarter of 2014 and end-2016. It also suggests the central bank will find no resistance to cutting interest rates once again to a new record low next month, with inflation stagnated below the bottom end of its target range amid double-digit unemployment rates.