Economic activity grows 0.01% in April, reveals Central Bank

For Júlio Miragaya, federal advisor to the Federal Economic Council (Cofecon), the Central Bank index does not allow for a more in-depth analysis of economic performance, as it covers a single month and the Brazilian economy is “extremely” volatile.

“Other indices allow us to have a clearer analysis, whether through the projection of the Ministry of Finance, or through the projection of the Focus Market Report or the International Monetary Fund itself, which points to growth in GDP (Gross Domestic Product) oscillating between 2% and 2 .5%”, he explains.

André Galhardo, economic consultant at Remessa Online, states that the performance of retail trade and the services sector influenced the result by 0.01%.

“Industry fell 0.5% in April and this ended up pulling the IBC-Br down. However, despite this merely marginal growth, after a drop of 0.36% recorded in March, we still have retail trade and the services sector as catalysts for Brazil’s economic growth in 2024, with reservations only in relation to the month of May”, he highlights.

According to the data, compared to April 2023, the IBC-Br registered an increase of 4.01%. In the last 12 months, the index increased 1.81%.

For economist Cesar Bergo, the result shows that the Brazilian economy is stable.

“This number is important, because in March we had a drop. This shows a recovery in the economy and, more than that, a positive dynamic. Even though this month registered 0.01%, in the year to date we have ( increase) of 2.08%”, he points out.

In the quarter ended in April, the IBC-Br registered an increase of 0.76% compared to the previous quarter. Compared to the same quarter last year, growth was 1.63%.

Expectations

Cesar Bergo explains that the result for the month of May should be negative, due to climate issues and disasters that happened in the south of Brazil.

“With the investments made in Rio Grande do Sul for its recovery, it is likely that from June this loss will be compensated and growth should resume. There is no doubt that the service sector is showing a lot of strength”, he points out.

Bergo points out that the Central Bank should not reduce the interest rate any further and, if it does, it will be at a slower pace. He explains that this directly impacts companies’ finances and other issues related to the country’s economy.

For André Galhardo, expectations for the coming months are positive for retail trade and the services sector, which should continue the growth process of the Brazilian economy. He highlights that inflation continues to rise, but at a less intense pace, which opens up space in the family budget and provides conditions for families to consume higher priced products.