Economic activity is up 0.56% in April, informs BC

In April, the IBC-Br reached 148.33 points. In comparison with the same month of 2022, there was a growth of 3.31% (without adjustment for the period, since the comparison is between equal months). Accumulated in 12 months, the indicator was also positive at 3.43%.

The increase in April follows the retraction registered in March, preceded by stability in January and growth in February.

The IBC-Br is a way of evaluating the evolution of the country’s economic activity and helps the BC to make decisions about the basic interest rate, the Selic, currently set at 13.75% per year. The index incorporates information on the activity level of sectors of the economy – industry, commerce and services and agriculture –, in addition to the volume of taxes.

The Selic has been at 13.75% since August last year and is the highest level since January 2017, when it was also at that level. It is the main instrument used by the Central Bank to reach the inflation target, because the rate affects prices, since higher interest rates make credit more expensive and stimulate savings, avoiding heated demand.

In March 2021, the BC began a cycle of monetary tightening, amid rising food, energy and fuel prices. However, the Selic level has been criticized by the federal government, which demands a reduction to boost economic growth.

Next week, on the 20th and 21st, the BC’s Monetary Policy Committee will hold its fourth meeting of the year to define the basic interest rate.

GDP

The official indicator of the Brazilian economy is the Gross Domestic Product (GDP), calculated by the Brazilian Institute of Geography and Statistics (IBGE). With a quarterly result, GDP for the first quarter of 2023 will be released on June 1st. GDP is the sum of all final goods and services produced by a country.

In 2022, Brazil’s GDP grew by 2.9%, totaling BRL 9.9 trillion.